Correlation Between JSW Holdings and Life Insurance
Can any of the company-specific risk be diversified away by investing in both JSW Holdings 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 JSW Holdings and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSW Holdings Limited and Life Insurance, you can compare the effects of market volatilities on JSW Holdings 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 JSW Holdings with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSW Holdings and Life Insurance.
Diversification Opportunities for JSW Holdings and Life Insurance
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JSW and Life is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JSW Holdings Limited and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and JSW Holdings 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 JSW Holdings Limited 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 JSW Holdings i.e., JSW Holdings and Life Insurance go up and down completely randomly.
Pair Corralation between JSW Holdings and Life Insurance
Assuming the 90 days trading horizon JSW Holdings Limited is expected to generate 1.47 times more return on investment than Life Insurance. However, JSW Holdings is 1.47 times more volatile than Life Insurance. It trades about 0.14 of its potential returns per unit of risk. Life Insurance is currently generating about 0.05 per unit of risk. If you would invest 509,415 in JSW Holdings Limited on September 4, 2024 and sell it today you would earn a total of 933,905 from holding JSW Holdings Limited or generate 183.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JSW Holdings Limited vs. Life Insurance
Performance |
| Timeline |
| JSW Holdings Limited |
| Life Insurance |
JSW Holdings and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSW Holdings and Life Insurance
The main advantage of trading using opposite JSW Holdings and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSW Holdings 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.| JSW Holdings vs. Mahamaya Steel Industries | JSW Holdings vs. Music Broadcast Limited | JSW Holdings vs. Rainbow Childrens Medicare | JSW Holdings vs. Steel Authority of |
| Life Insurance vs. MRF Limited | Life Insurance vs. JSW Holdings Limited | Life Insurance vs. Maharashtra Scooters Limited | Life Insurance vs. Nalwa Sons Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |