Correlation Between ILFS Investment and Life Insurance
Can any of the company-specific risk be diversified away by investing in both ILFS Investment and Life 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 ILFS Investment and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ILFS Investment Managers and Life Insurance, you can compare the effects of market volatilities on ILFS Investment and Life 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 ILFS Investment with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ILFS Investment and Life Insurance.
Diversification Opportunities for ILFS Investment and Life Insurance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ILFS and Life is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and ILFS Investment 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 ILFS Investment Managers are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of ILFS Investment i.e., ILFS Investment and Life Insurance go up and down completely randomly.
Pair Corralation between ILFS Investment and Life Insurance
Assuming the 90 days trading horizon ILFS Investment Managers is expected to generate 1.89 times more return on investment than Life Insurance. However, ILFS Investment is 1.89 times more volatile than Life Insurance. It trades about -0.09 of its potential returns per unit of risk. Life Insurance is currently generating about -0.32 per unit of risk. If you would invest 1,086 in ILFS Investment Managers on October 30, 2024 and sell it today you would lose (72.00) from holding ILFS Investment Managers or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ILFS Investment Managers vs. Life Insurance
Performance |
| Timeline |
| ILFS Investment Managers |
| Life Insurance |
ILFS Investment and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ILFS Investment and Life Insurance
The main advantage of trading using opposite ILFS Investment and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ILFS Investment position performs unexpectedly, Life 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| ILFS Investment vs. Nalwa Sons Investments | ILFS Investment vs. Kalyani Investment | ILFS Investment vs. Pilani Investment and | ILFS Investment vs. Kingfa Science Technology |
| Life Insurance vs. Som Distilleries Breweries | Life Insurance vs. Future Retail Limited | Life Insurance vs. DCB Bank Limited | Life Insurance vs. UCO Bank |
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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