Correlation Between General Insurance and Modi Rubber
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By analyzing existing cross correlation between General Insurance and Modi Rubber Limited, you can compare the effects of market volatilities on General Insurance and Modi Rubber 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 Modi Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and Modi Rubber.
Diversification Opportunities for General Insurance and Modi Rubber
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between General and Modi is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and Modi Rubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modi Rubber 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 Modi Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modi Rubber Limited has no effect on the direction of General Insurance i.e., General Insurance and Modi Rubber go up and down completely randomly.
Pair Corralation between General Insurance and Modi Rubber
Assuming the 90 days trading horizon General Insurance is expected to generate 1.35 times more return on investment than Modi Rubber. However, General Insurance is 1.35 times more volatile than Modi Rubber Limited. It trades about -0.06 of its potential returns per unit of risk. Modi Rubber Limited is currently generating about -0.22 per unit of risk. If you would invest 44,480 in General Insurance on October 29, 2024 and sell it today you would lose (2,445) from holding General Insurance or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. Modi Rubber Limited
Performance |
| Timeline |
| General Insurance |
| Modi Rubber Limited |
General Insurance and Modi Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and Modi Rubber
The main advantage of trading using opposite General Insurance and Modi Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, Modi Rubber 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 Modi Rubber will offset losses from the drop in Modi Rubber's long position.| General Insurance vs. NRB Industrial Bearings | General Insurance vs. Samhi Hotels Limited | General Insurance vs. Hisar Metal Industries | General Insurance vs. Blue Coast Hotels |
| Modi Rubber vs. The Investment Trust | Modi Rubber vs. Sasken Technologies Limited | Modi Rubber vs. SIL Investments Limited | Modi Rubber vs. BF Investment 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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