Correlation Between General Insurance and Paramount Communications
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By analyzing existing cross correlation between General Insurance and Paramount Communications Limited, you can compare the effects of market volatilities on General Insurance and Paramount Communications 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 Paramount Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and Paramount Communications.
Diversification Opportunities for General Insurance and Paramount Communications
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between General and Paramount is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and Paramount Communications Limit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Communications 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 Paramount Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Communications has no effect on the direction of General Insurance i.e., General Insurance and Paramount Communications go up and down completely randomly.
Pair Corralation between General Insurance and Paramount Communications
Assuming the 90 days trading horizon General Insurance is expected to generate 1.05 times more return on investment than Paramount Communications. However, General Insurance is 1.05 times more volatile than Paramount Communications Limited. It trades about 0.05 of its potential returns per unit of risk. Paramount Communications Limited is currently generating about -0.04 per unit of risk. If you would invest 37,550 in General Insurance on November 7, 2024 and sell it today you would earn a total of 2,590 from holding General Insurance or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. Paramount Communications Limit
Performance |
| Timeline |
| General Insurance |
| Paramount Communications |
General Insurance and Paramount Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and Paramount Communications
The main advantage of trading using opposite General Insurance and Paramount Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, Paramount Communications 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 Paramount Communications will offset losses from the drop in Paramount Communications' long position.| General Insurance vs. Jindal Drilling And | General Insurance vs. Rajnandini Metal Limited | General Insurance vs. Credo Brands Marketing | General Insurance vs. Cantabil Retail India |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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