Correlation Between Ford and SBI Life
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By analyzing existing cross correlation between Ford Motor and SBI Life Insurance, you can compare the effects of market volatilities on Ford and SBI 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 Ford with a short position of SBI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SBI Life.
Diversification Opportunities for Ford and SBI Life
Very good diversification
The 3 months correlation between Ford and SBI is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SBI Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Life Insurance and Ford 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 Ford Motor are associated (or correlated) with SBI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Life Insurance has no effect on the direction of Ford i.e., Ford and SBI Life go up and down completely randomly.
Pair Corralation between Ford and SBI Life
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.56 times more return on investment than SBI Life. However, Ford is 1.56 times more volatile than SBI Life Insurance. It trades about 0.01 of its potential returns per unit of risk. SBI Life Insurance is currently generating about -0.01 per unit of risk. If you would invest 1,152 in Ford Motor on August 25, 2024 and sell it today you would lose (34.00) from holding Ford Motor or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.84% |
| Values | Daily Returns |
Ford Motor vs. SBI Life Insurance
Performance |
| Timeline |
| Ford Motor |
| SBI Life Insurance |
Ford and SBI Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SBI Life
The main advantage of trading using opposite Ford and SBI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SBI 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 SBI Life will offset losses from the drop in SBI Life's long position.The idea behind Ford Motor and SBI Life Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SBI Life vs. Heritage Foods Limited | SBI Life vs. Juniper Hotels | SBI Life vs. EIH Associated Hotels | SBI Life vs. Chalet Hotels Limited |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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