Correlation Between SBI Insurance and VIENNA INSURANCE
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and VIENNA INSURANCE 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 VIENNA INSURANCE 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 VIENNA INSURANCE GR, you can compare the effects of market volatilities on SBI Insurance and VIENNA INSURANCE 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 VIENNA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and VIENNA INSURANCE.
Diversification Opportunities for SBI Insurance and VIENNA INSURANCE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and VIENNA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and VIENNA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIENNA INSURANCE 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 VIENNA INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIENNA INSURANCE has no effect on the direction of SBI Insurance i.e., SBI Insurance and VIENNA INSURANCE go up and down completely randomly.
Pair Corralation between SBI Insurance and VIENNA INSURANCE
Assuming the 90 days trading horizon SBI Insurance is expected to generate 42.06 times less return on investment than VIENNA INSURANCE. In addition to that, SBI Insurance is 2.14 times more volatile than VIENNA INSURANCE GR. It trades about 0.0 of its total potential returns per unit of risk. VIENNA INSURANCE GR is currently generating about 0.08 per unit of volatility. If you would invest 2,273 in VIENNA INSURANCE GR on October 30, 2024 and sell it today you would earn a total of 852.00 from holding VIENNA INSURANCE GR or generate 37.48% 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. VIENNA INSURANCE GR
Performance |
| Timeline |
| SBI Insurance Group |
| VIENNA INSURANCE |
SBI Insurance and VIENNA INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and VIENNA INSURANCE
The main advantage of trading using opposite SBI Insurance and VIENNA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, VIENNA INSURANCE 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 VIENNA INSURANCE will offset losses from the drop in VIENNA INSURANCE's long position.| SBI Insurance vs. Hitachi Construction Machinery | SBI Insurance vs. PACIFIC ONLINE | SBI Insurance vs. Tokyu Construction Co | SBI Insurance vs. Lamar Advertising |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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