Correlation Between General Insurance and Bank of Maharashtra
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By analyzing existing cross correlation between General Insurance and Bank of Maharashtra, you can compare the effects of market volatilities on General Insurance and Bank of Maharashtra 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 Bank of Maharashtra. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and Bank of Maharashtra.
Diversification Opportunities for General Insurance and Bank of Maharashtra
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and Bank is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and Bank of Maharashtra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Maharashtra 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 Bank of Maharashtra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Maharashtra has no effect on the direction of General Insurance i.e., General Insurance and Bank of Maharashtra go up and down completely randomly.
Pair Corralation between General Insurance and Bank of Maharashtra
Assuming the 90 days trading horizon General Insurance is expected to generate 1.09 times more return on investment than Bank of Maharashtra. However, General Insurance is 1.09 times more volatile than Bank of Maharashtra. It trades about 0.06 of its potential returns per unit of risk. Bank of Maharashtra is currently generating about -0.01 per unit of risk. If you would invest 32,811 in General Insurance on September 3, 2024 and sell it today you would earn a total of 7,149 from holding General Insurance or generate 21.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. Bank of Maharashtra
Performance |
| Timeline |
| General Insurance |
| Bank of Maharashtra |
General Insurance and Bank of Maharashtra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and Bank of Maharashtra
The main advantage of trading using opposite General Insurance and Bank of Maharashtra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, Bank of Maharashtra 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 Bank of Maharashtra will offset losses from the drop in Bank of Maharashtra's long position.| General Insurance vs. Tata Communications Limited | General Insurance vs. Kalyani Steels Limited | General Insurance vs. KNR Constructions Limited | General Insurance vs. Bigbloc Construction Limited |
| Bank of Maharashtra vs. Reliance Industries Limited | Bank of Maharashtra vs. Shipping | Bank of Maharashtra vs. Indo Borax Chemicals | Bank of Maharashtra vs. Kingfa Science Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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