Correlation Between Jubilee Life and United Insurance
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and United 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 Jubilee Life and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jubilee Life Insurance and United Insurance, you can compare the effects of market volatilities on Jubilee Life and United 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 Jubilee Life with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and United Insurance.
Diversification Opportunities for Jubilee Life and United Insurance
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jubilee and United is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and United Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance and Jubilee 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 Jubilee Life Insurance are associated (or correlated) with United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance has no effect on the direction of Jubilee Life i.e., Jubilee Life and United Insurance go up and down completely randomly.
Pair Corralation between Jubilee Life and United Insurance
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 2.06 times more return on investment than United Insurance. However, Jubilee Life is 2.06 times more volatile than United Insurance. It trades about 0.05 of its potential returns per unit of risk. United Insurance is currently generating about -0.29 per unit of risk. If you would invest 13,400 in Jubilee Life Insurance on August 28, 2024 and sell it today you would earn a total of 309.00 from holding Jubilee Life Insurance or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jubilee Life Insurance vs. United Insurance
Performance |
| Timeline |
| Jubilee Life Insurance |
| United Insurance |
Jubilee Life and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and United Insurance
The main advantage of trading using opposite Jubilee Life and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, United 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 United Insurance will offset losses from the drop in United Insurance's long position.| Jubilee Life vs. Habib Bank | Jubilee Life vs. National Bank of | Jubilee Life vs. United Bank | Jubilee Life vs. MCB Bank |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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