Correlation Between IGI Life and Big Bird
Can any of the company-specific risk be diversified away by investing in both IGI Life and Big Bird 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 Big Bird 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 Big Bird Foods, you can compare the effects of market volatilities on IGI Life and Big Bird 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 Big Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and Big Bird.
Diversification Opportunities for IGI Life and Big Bird
Excellent diversification
The 3 months correlation between IGI and Big is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life Insurance and Big Bird Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Bird Foods 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 Big Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Bird Foods has no effect on the direction of IGI Life i.e., IGI Life and Big Bird go up and down completely randomly.
Pair Corralation between IGI Life and Big Bird
Assuming the 90 days trading horizon IGI Life Insurance is expected to generate 0.82 times more return on investment than Big Bird. However, IGI Life Insurance is 1.22 times less risky than Big Bird. It trades about 0.01 of its potential returns per unit of risk. Big Bird Foods is currently generating about -0.11 per unit of risk. If you would invest 1,395 in IGI Life Insurance on October 25, 2024 and sell it today you would lose (1.00) from holding IGI Life Insurance or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.55% |
| Values | Daily Returns |
IGI Life Insurance vs. Big Bird Foods
Performance |
| Timeline |
| IGI Life Insurance |
| Big Bird Foods |
IGI Life and Big Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and Big Bird
The main advantage of trading using opposite IGI Life and Big Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, Big Bird 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 Big Bird will offset losses from the drop in Big Bird's long position.| IGI Life vs. TPL Insurance | IGI Life vs. Engro Polymer Chemicals | IGI Life vs. Sardar Chemical Industries | IGI Life vs. Sitara Chemical Industries |
| Big Bird vs. Habib Insurance | Big Bird vs. Invest Capital Investment | Big Bird vs. IGI Life Insurance | Big Bird vs. Oil and Gas |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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