Correlation Between General Insurance and NRB Industrial
Can any of the company-specific risk be diversified away by investing in both General Insurance and NRB Industrial 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 General Insurance and NRB Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Insurance and NRB Industrial Bearings, you can compare the effects of market volatilities on General Insurance and NRB Industrial 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 NRB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and NRB Industrial.
Diversification Opportunities for General Insurance and NRB Industrial
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and NRB is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and NRB Industrial Bearings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRB Industrial Bearings 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 NRB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRB Industrial Bearings has no effect on the direction of General Insurance i.e., General Insurance and NRB Industrial go up and down completely randomly.
Pair Corralation between General Insurance and NRB Industrial
Assuming the 90 days trading horizon General Insurance is expected to generate 1.57 times more return on investment than NRB Industrial. However, General Insurance is 1.57 times more volatile than NRB Industrial Bearings. It trades about 0.02 of its potential returns per unit of risk. NRB Industrial Bearings is currently generating about -0.08 per unit of risk. If you would invest 39,960 in General Insurance on October 30, 2024 and sell it today you would lose (60.00) from holding General Insurance or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. NRB Industrial Bearings
Performance |
| Timeline |
| General Insurance |
| NRB Industrial Bearings |
General Insurance and NRB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and NRB Industrial
The main advantage of trading using opposite General Insurance and NRB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, NRB Industrial 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 NRB Industrial will offset losses from the drop in NRB Industrial's long position.| General Insurance vs. Sportking India Limited | General Insurance vs. Silver Touch Technologies | General Insurance vs. Bikaji Foods International | General Insurance vs. HDFC Asset Management |
| NRB Industrial vs. Pritish Nandy Communications | NRB Industrial vs. Alkali Metals Limited | NRB Industrial vs. Indian Metals Ferro | NRB Industrial vs. Gokul Refoils and |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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