Correlation Between IGI Life and Beco Steel
Can any of the company-specific risk be diversified away by investing in both IGI Life and Beco Steel 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 Beco Steel 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 Beco Steel, you can compare the effects of market volatilities on IGI Life and Beco Steel 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 Beco Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and Beco Steel.
Diversification Opportunities for IGI Life and Beco Steel
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IGI and Beco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life Insurance and Beco Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beco Steel 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 Beco Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beco Steel has no effect on the direction of IGI Life i.e., IGI Life and Beco Steel go up and down completely randomly.
Pair Corralation between IGI Life and Beco Steel
Assuming the 90 days trading horizon IGI Life Insurance is expected to generate 1.41 times more return on investment than Beco Steel. However, IGI Life is 1.41 times more volatile than Beco Steel. It trades about 0.06 of its potential returns per unit of risk. Beco Steel is currently generating about -0.03 per unit of risk. If you would invest 1,451 in IGI Life Insurance on November 8, 2024 and sell it today you would earn a total of 47.00 from holding IGI Life Insurance or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
IGI Life Insurance vs. Beco Steel
Performance |
| Timeline |
| IGI Life Insurance |
| Beco Steel |
IGI Life and Beco Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and Beco Steel
The main advantage of trading using opposite IGI Life and Beco Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, Beco Steel 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 Beco Steel will offset losses from the drop in Beco Steel's long position.| IGI Life vs. Sindh Modaraba Management | IGI Life vs. Century Insurance | IGI Life vs. JS Bank | IGI Life vs. Allied Bank |
| Beco Steel vs. Metropolitan Steel Corp | Beco Steel vs. Agha Steel Industries | Beco Steel vs. Aisha Steel Mills | Beco Steel vs. Amreli Steels |
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 CEOs Directory module to screen CEOs from public companies around the world.
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