Correlation Between Libra Insurance and Aerodrome
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Aerodrome 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 Libra Insurance and Aerodrome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Aerodrome Group, you can compare the effects of market volatilities on Libra Insurance and Aerodrome 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 Libra Insurance with a short position of Aerodrome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Aerodrome.
Diversification Opportunities for Libra Insurance and Aerodrome
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Libra and Aerodrome is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Aerodrome Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerodrome Group and Libra Insurance 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 Libra Insurance are associated (or correlated) with Aerodrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerodrome Group has no effect on the direction of Libra Insurance i.e., Libra Insurance and Aerodrome go up and down completely randomly.
Pair Corralation between Libra Insurance and Aerodrome
Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.25 times more return on investment than Aerodrome. However, Libra Insurance is 3.97 times less risky than Aerodrome. It trades about 0.27 of its potential returns per unit of risk. Aerodrome Group is currently generating about -0.02 per unit of risk. If you would invest 76,000 in Libra Insurance on August 25, 2024 and sell it today you would earn a total of 6,160 from holding Libra Insurance or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Aerodrome Group
Performance |
| Timeline |
| Libra Insurance |
| Aerodrome Group |
Libra Insurance and Aerodrome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Aerodrome
The main advantage of trading using opposite Libra Insurance and Aerodrome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Aerodrome 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 Aerodrome will offset losses from the drop in Aerodrome's long position.| Libra Insurance vs. Elbit Medical Technologies | Libra Insurance vs. Victory Supermarket Chain | Libra Insurance vs. Terminal X Online | Libra Insurance vs. Azorim Investment Development |
| Aerodrome vs. Hiron Trade Investments Industrial | Aerodrome vs. Analyst IMS Investment | Aerodrome vs. GODM Investments | Aerodrome vs. Libra Insurance |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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