Correlation Between KPIT Technologies and Life Insurance
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By analyzing existing cross correlation between KPIT Technologies Limited and Life Insurance, you can compare the effects of market volatilities on KPIT Technologies 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 KPIT Technologies with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPIT Technologies and Life Insurance.
Diversification Opportunities for KPIT Technologies and Life Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KPIT and Life is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding KPIT Technologies Limited and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and KPIT Technologies 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 KPIT Technologies 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 KPIT Technologies i.e., KPIT Technologies and Life Insurance go up and down completely randomly.
Pair Corralation between KPIT Technologies and Life Insurance
Assuming the 90 days trading horizon KPIT Technologies Limited is expected to generate 1.32 times more return on investment than Life Insurance. However, KPIT Technologies is 1.32 times more volatile than Life Insurance. It trades about 0.26 of its potential returns per unit of risk. Life Insurance is currently generating about 0.1 per unit of risk. If you would invest 135,795 in KPIT Technologies Limited on September 14, 2024 and sell it today you would earn a total of 18,325 from holding KPIT Technologies Limited or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KPIT Technologies Limited vs. Life Insurance
Performance |
| Timeline |
| KPIT Technologies |
| Life Insurance |
KPIT Technologies and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPIT Technologies and Life Insurance
The main advantage of trading using opposite KPIT Technologies and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPIT Technologies 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.| KPIT Technologies vs. Life Insurance | KPIT Technologies vs. Apex Frozen Foods | KPIT Technologies vs. Omkar Speciality Chemicals | KPIT Technologies vs. Agro Tech Foods |
| Life Insurance vs. Vodafone Idea Limited | Life Insurance vs. Yes Bank Limited | Life Insurance vs. Indian Overseas Bank | Life Insurance vs. Indian Oil |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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