Correlation Between IGI Life and Crescent Star
Can any of the company-specific risk be diversified away by investing in both IGI Life and Crescent Star 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 Crescent Star 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 Crescent Star Insurance, you can compare the effects of market volatilities on IGI Life and Crescent Star 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 Crescent Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and Crescent Star.
Diversification Opportunities for IGI Life and Crescent Star
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGI and Crescent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life Insurance and Crescent Star Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Star 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 Crescent Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Star Insurance has no effect on the direction of IGI Life i.e., IGI Life and Crescent Star go up and down completely randomly.
Pair Corralation between IGI Life and Crescent Star
Assuming the 90 days trading horizon IGI Life Insurance is expected to generate 2.68 times more return on investment than Crescent Star. However, IGI Life is 2.68 times more volatile than Crescent Star Insurance. It trades about 0.0 of its potential returns per unit of risk. Crescent Star Insurance is currently generating about -0.33 per unit of risk. If you would invest 1,549 in IGI Life Insurance on November 7, 2024 and sell it today you would lose (22.00) from holding IGI Life Insurance or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
IGI Life Insurance vs. Crescent Star Insurance
Performance |
| Timeline |
| IGI Life Insurance |
| Crescent Star Insurance |
IGI Life and Crescent Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and Crescent Star
The main advantage of trading using opposite IGI Life and Crescent Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, Crescent Star 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 Crescent Star will offset losses from the drop in Crescent Star's long position.| IGI Life vs. Agha Steel Industries | IGI Life vs. Honda Atlas Cars | IGI Life vs. Metropolitan Steel Corp | IGI Life vs. National Foods |
| Crescent Star vs. Masood Textile Mills | Crescent Star vs. Fauji Foods | Crescent Star vs. KSB Pumps | Crescent Star vs. Mari Petroleum |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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