Correlation Between SBI Insurance and Monument Mining
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Monument Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SBI Insurance and Monument Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and Monument Mining Limited, you can compare the effects of market volatilities on SBI Insurance and Monument Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SBI Insurance with a short position of Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Monument Mining.
Diversification Opportunities for SBI Insurance and Monument Mining
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and Monument is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining and SBI Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SBI Insurance Group are associated (or correlated) with Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of SBI Insurance i.e., SBI Insurance and Monument Mining go up and down completely randomly.
Pair Corralation between SBI Insurance and Monument Mining
Assuming the 90 days trading horizon SBI Insurance is expected to generate 3.69 times less return on investment than Monument Mining. But when comparing it to its historical volatility, SBI Insurance Group is 4.87 times less risky than Monument Mining. It trades about 0.18 of its potential returns per unit of risk. Monument Mining Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Monument Mining Limited on November 7, 2024 and sell it today you would earn a total of 3.00 from holding Monument Mining Limited or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. Monument Mining Limited
Performance |
| Timeline |
| SBI Insurance Group |
| Monument Mining |
SBI Insurance and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Monument Mining
The main advantage of trading using opposite SBI Insurance and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Monument Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Monument Mining will offset losses from the drop in Monument Mining's long position.| SBI Insurance vs. RYU Apparel | SBI Insurance vs. Aluminum of | SBI Insurance vs. Fortescue Metals Group | SBI Insurance vs. ADRIATIC METALS LS 013355 |
| Monument Mining vs. AWILCO DRILLING PLC | Monument Mining vs. MAANSHAN IRON H | Monument Mining vs. STEEL DYNAMICS | Monument Mining vs. CALTAGIRONE EDITORE |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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