Correlation Between General Insurance and COSMO FIRST
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By analyzing existing cross correlation between General Insurance and COSMO FIRST LIMITED, you can compare the effects of market volatilities on General Insurance and COSMO FIRST 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 General Insurance with a short position of COSMO FIRST. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and COSMO FIRST.
Diversification Opportunities for General Insurance and COSMO FIRST
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between General and COSMO is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST LIMITED and General 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 General Insurance are associated (or correlated) with COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of General Insurance i.e., General Insurance and COSMO FIRST go up and down completely randomly.
Pair Corralation between General Insurance and COSMO FIRST
Assuming the 90 days trading horizon General Insurance is expected to under-perform the COSMO FIRST. But the stock apears to be less risky and, when comparing its historical volatility, General Insurance is 1.09 times less risky than COSMO FIRST. The stock trades about -0.12 of its potential returns per unit of risk. The COSMO FIRST LIMITED is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 88,770 in COSMO FIRST LIMITED on October 24, 2024 and sell it today you would lose (7,405) from holding COSMO FIRST LIMITED or give up 8.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. COSMO FIRST LIMITED
Performance |
| Timeline |
| General Insurance |
| COSMO FIRST LIMITED |
General Insurance and COSMO FIRST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and COSMO FIRST
The main advantage of trading using opposite General Insurance and COSMO FIRST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, COSMO FIRST 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 COSMO FIRST will offset losses from the drop in COSMO FIRST's long position.| General Insurance vs. Reliance Industries Limited | General Insurance vs. Oil Natural Gas | General Insurance vs. ICICI Bank Limited | General Insurance vs. Bharti Airtel Limited |
| COSMO FIRST vs. Gujarat Lease Financing | COSMO FIRST vs. Bharatiya Global Infomedia | COSMO FIRST vs. Hisar Metal Industries | COSMO FIRST vs. Next Mediaworks 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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