Correlation Between IGI Life and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both IGI Life and Atlas Insurance 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 IGI Life and Atlas Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGI Life Insurance and Atlas Insurance, you can compare the effects of market volatilities on IGI Life and Atlas Insurance 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 IGI Life with a short position of Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and Atlas Insurance.
Diversification Opportunities for IGI Life and Atlas Insurance
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGI and Atlas is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life Insurance and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance and IGI Life 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 IGI Life Insurance are associated (or correlated) with Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of IGI Life i.e., IGI Life and Atlas Insurance go up and down completely randomly.
Pair Corralation between IGI Life and Atlas Insurance
Assuming the 90 days trading horizon IGI Life is expected to generate 1.07 times less return on investment than Atlas Insurance. In addition to that, IGI Life is 2.06 times more volatile than Atlas Insurance. It trades about 0.05 of its total potential returns per unit of risk. Atlas Insurance is currently generating about 0.11 per unit of volatility. If you would invest 2,690 in Atlas Insurance on October 30, 2024 and sell it today you would earn a total of 3,304 from holding Atlas Insurance or generate 122.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.41% |
| Values | Daily Returns |
IGI Life Insurance vs. Atlas Insurance
Performance |
| Timeline |
| IGI Life Insurance |
| Atlas Insurance |
IGI Life and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and Atlas Insurance
The main advantage of trading using opposite IGI Life and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, Atlas Insurance 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 Atlas Insurance will offset losses from the drop in Atlas Insurance's long position.| IGI Life vs. Metropolitan Steel Corp | IGI Life vs. JS Bank | IGI Life vs. Amreli Steels | IGI Life vs. Apna Microfinance Bank |
| Atlas Insurance vs. Nimir Industrial Chemical | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. Unilever Pakistan Foods | Atlas Insurance vs. Invest Capital Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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