Correlation Between IGI Life and East West
Can any of the company-specific risk be diversified away by investing in both IGI Life and East West 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 East West 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 East West Insurance, you can compare the effects of market volatilities on IGI Life and East West 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 East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and East West.
Diversification Opportunities for IGI Life and East West
Good diversification
The 3 months correlation between IGI and East is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life Insurance and East West Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West 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 East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Insurance has no effect on the direction of IGI Life i.e., IGI Life and East West go up and down completely randomly.
Pair Corralation between IGI Life and East West
If you would invest 5,729 in East West Insurance on October 30, 2024 and sell it today you would earn a total of 0.00 from holding East West Insurance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 41.18% |
| Values | Daily Returns |
IGI Life Insurance vs. East West Insurance
Performance |
| Timeline |
| IGI Life Insurance |
| East West Insurance |
IGI Life and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and East West
The main advantage of trading using opposite IGI Life and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, East West 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 East West will offset losses from the drop in East West'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 |
| East West vs. Crescent Star Insurance | East West vs. National Foods | East West vs. Century Insurance | East West vs. Bank of Punjab |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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