Correlation Between SBI Insurance and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle Group, you can compare the effects of market volatilities on SBI Insurance and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Commercial Vehicle.
Diversification Opportunities for SBI Insurance and Commercial Vehicle
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and Commercial is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of SBI Insurance i.e., SBI Insurance and Commercial Vehicle go up and down completely randomly.
Pair Corralation between SBI Insurance and Commercial Vehicle
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.61 times more return on investment than Commercial Vehicle. However, SBI Insurance Group is 1.63 times less risky than Commercial Vehicle. It trades about 0.01 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.05 per unit of risk. If you would invest 625.00 in SBI Insurance Group on September 12, 2024 and sell it today you would earn a total of 0.00 from holding SBI Insurance Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. Commercial Vehicle Group
Performance |
| Timeline |
| SBI Insurance Group |
| Commercial Vehicle |
SBI Insurance and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Commercial Vehicle
The main advantage of trading using opposite SBI Insurance and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
| Commercial Vehicle vs. Reinsurance Group of | Commercial Vehicle vs. SOLSTAD OFFSHORE NK | Commercial Vehicle vs. SBI Insurance Group | Commercial Vehicle vs. SBM OFFSHORE |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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