Correlation Between PREMIER FOODS and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both PREMIER FOODS and SBI 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 PREMIER FOODS and SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PREMIER FOODS and SBI Insurance Group, you can compare the effects of market volatilities on PREMIER FOODS and SBI 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 PREMIER FOODS with a short position of SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PREMIER FOODS and SBI Insurance.
Diversification Opportunities for PREMIER FOODS and SBI Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PREMIER and SBI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER FOODS and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group and PREMIER FOODS 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 PREMIER FOODS are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of PREMIER FOODS i.e., PREMIER FOODS and SBI Insurance go up and down completely randomly.
Pair Corralation between PREMIER FOODS and SBI Insurance
Assuming the 90 days trading horizon PREMIER FOODS is expected to under-perform the SBI Insurance. But the stock apears to be less risky and, when comparing its historical volatility, PREMIER FOODS is 1.43 times less risky than SBI Insurance. The stock trades about -0.14 of its potential returns per unit of risk. The SBI Insurance Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 625.00 in SBI Insurance Group on October 11, 2024 and sell it today you would earn a total of 20.00 from holding SBI Insurance Group or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
PREMIER FOODS vs. SBI Insurance Group
Performance |
| Timeline |
| PREMIER FOODS |
| SBI Insurance Group |
PREMIER FOODS and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PREMIER FOODS and SBI Insurance
The main advantage of trading using opposite PREMIER FOODS and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PREMIER FOODS position performs unexpectedly, SBI 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| PREMIER FOODS vs. FIREWEED METALS P | PREMIER FOODS vs. Aluminum of | PREMIER FOODS vs. Hua Hong Semiconductor | PREMIER FOODS vs. ARDAGH METAL PACDL 0001 |
| SBI Insurance vs. Performance Food Group | SBI Insurance vs. PREMIER FOODS | SBI Insurance vs. G III Apparel Group | SBI Insurance vs. alstria office REIT AG |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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