Correlation Between General Insurance and Golden Tobacco
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By analyzing existing cross correlation between General Insurance and Golden Tobacco Limited, you can compare the effects of market volatilities on General Insurance and Golden Tobacco 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 Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and Golden Tobacco.
Diversification Opportunities for General Insurance and Golden Tobacco
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between General and Golden is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco 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 Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of General Insurance i.e., General Insurance and Golden Tobacco go up and down completely randomly.
Pair Corralation between General Insurance and Golden Tobacco
Assuming the 90 days trading horizon General Insurance is expected to generate 1.27 times more return on investment than Golden Tobacco. However, General Insurance is 1.27 times more volatile than Golden Tobacco Limited. It trades about 0.08 of its potential returns per unit of risk. Golden Tobacco Limited is currently generating about -0.03 per unit of risk. If you would invest 17,597 in General Insurance on September 28, 2024 and sell it today you would earn a total of 28,948 from holding General Insurance or generate 164.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
General Insurance vs. Golden Tobacco Limited
Performance |
| Timeline |
| General Insurance |
| Golden Tobacco |
General Insurance and Golden Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and Golden Tobacco
The main advantage of trading using opposite General Insurance and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.| General Insurance vs. Reliance Industries Limited | General Insurance vs. State Bank of | General Insurance vs. Oil Natural Gas | General Insurance vs. ICICI Bank Limited |
| Golden Tobacco vs. Patanjali Foods Limited | Golden Tobacco vs. Parag Milk Foods | Golden Tobacco vs. General Insurance | Golden Tobacco vs. Apex Frozen Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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