Correlation Between East West and IGI Life
Can any of the company-specific risk be diversified away by investing in both East West and IGI Life 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 East West and IGI Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Insurance and IGI Life Insurance, you can compare the effects of market volatilities on East West and IGI Life 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 East West with a short position of IGI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and IGI Life.
Diversification Opportunities for East West and IGI Life
Very good diversification
The 3 months correlation between East and IGI is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding East West Insurance and IGI Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGI Life Insurance and East West 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 East West Insurance are associated (or correlated) with IGI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGI Life Insurance has no effect on the direction of East West i.e., East West and IGI Life go up and down completely randomly.
Pair Corralation between East West and IGI Life
If you would invest 1,549 in IGI Life Insurance on November 7, 2024 and sell it today you would lose (22.00) from holding IGI Life Insurance or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.89% |
| Values | Daily Returns |
East West Insurance vs. IGI Life Insurance
Performance |
| Timeline |
| East West Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| IGI Life Insurance |
East West and IGI Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and IGI Life
The main advantage of trading using opposite East West and IGI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, IGI Life 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 IGI Life will offset losses from the drop in IGI Life's long position.| East West vs. Pakistan Aluminium Beverage | East West vs. WorldCall Telecom | East West vs. Invest Capital Investment | East West vs. Murree Brewery |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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