Correlation Between KSB Pumps and Jubilee Life
Can any of the company-specific risk be diversified away by investing in both KSB Pumps and Jubilee Life 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 KSB Pumps and Jubilee Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSB Pumps and Jubilee Life Insurance, you can compare the effects of market volatilities on KSB Pumps and Jubilee Life 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 KSB Pumps with a short position of Jubilee Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSB Pumps and Jubilee Life.
Diversification Opportunities for KSB Pumps and Jubilee Life
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KSB and Jubilee is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding KSB Pumps and Jubilee Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Life Insurance and KSB Pumps 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 KSB Pumps are associated (or correlated) with Jubilee Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Life Insurance has no effect on the direction of KSB Pumps i.e., KSB Pumps and Jubilee Life go up and down completely randomly.
Pair Corralation between KSB Pumps and Jubilee Life
Assuming the 90 days trading horizon KSB Pumps is expected to generate 1.87 times less return on investment than Jubilee Life. In addition to that, KSB Pumps is 1.15 times more volatile than Jubilee Life Insurance. It trades about 0.02 of its total potential returns per unit of risk. Jubilee Life Insurance is currently generating about 0.05 per unit of volatility. If you would invest 13,400 in Jubilee Life Insurance on August 29, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KSB Pumps vs. Jubilee Life Insurance
Performance |
| Timeline |
| KSB Pumps |
| Jubilee Life Insurance |
KSB Pumps and Jubilee Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSB Pumps and Jubilee Life
The main advantage of trading using opposite KSB Pumps and Jubilee Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSB Pumps position performs unexpectedly, Jubilee Life 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 Jubilee Life will offset losses from the drop in Jubilee Life's long position.| KSB Pumps vs. Masood Textile Mills | KSB Pumps vs. Fauji Foods | KSB Pumps vs. Mari Petroleum | KSB Pumps vs. Loads |
| Jubilee Life vs. Habib Bank | Jubilee Life vs. National Bank of | Jubilee Life vs. United Bank | Jubilee Life vs. MCB 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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