Correlation Between SBI Insurance and X FAB
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on SBI Insurance and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and X FAB.
Diversification Opportunities for SBI Insurance and X FAB
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and XFB is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of SBI Insurance i.e., SBI Insurance and X FAB go up and down completely randomly.
Pair Corralation between SBI Insurance and X FAB
Assuming the 90 days trading horizon SBI Insurance is expected to generate 1.18 times less return on investment than X FAB. But when comparing it to its historical volatility, SBI Insurance Group is 1.7 times less risky than X FAB. It trades about 0.25 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 480.00 in X FAB Silicon Foundries on October 24, 2024 and sell it today you would earn a total of 36.00 from holding X FAB Silicon Foundries or generate 7.5% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| SBI Insurance Group |
| X FAB Silicon |
SBI Insurance and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and X FAB
The main advantage of trading using opposite SBI Insurance and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| SBI Insurance vs. MAGNUM MINING EXP | SBI Insurance vs. MAG SILVER | SBI Insurance vs. AGNC INVESTMENT | SBI Insurance vs. ECHO INVESTMENT ZY |
| X FAB vs. KINGBOARD CHEMICAL | X FAB vs. SILICON LABORATOR | X FAB vs. CHEMICAL INDUSTRIES | X FAB vs. X FAB Silicon Foundries |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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