Correlation Between Libra Insurance and Bram Indus
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Bram Indus 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 Bram Indus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Bram Indus, you can compare the effects of market volatilities on Libra Insurance and Bram Indus 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 Bram Indus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Bram Indus.
Diversification Opportunities for Libra Insurance and Bram Indus
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Libra and Bram is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Bram Indus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bram Indus 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 Bram Indus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bram Indus has no effect on the direction of Libra Insurance i.e., Libra Insurance and Bram Indus go up and down completely randomly.
Pair Corralation between Libra Insurance and Bram Indus
Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.72 times more return on investment than Bram Indus. However, Libra Insurance is 1.38 times less risky than Bram Indus. It trades about -0.13 of its potential returns per unit of risk. Bram Indus is currently generating about -0.13 per unit of risk. If you would invest 102,000 in Libra Insurance on October 25, 2024 and sell it today you would lose (3,420) from holding Libra Insurance or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Bram Indus
Performance |
| Timeline |
| Libra Insurance |
| Bram Indus |
Libra Insurance and Bram Indus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Bram Indus
The main advantage of trading using opposite Libra Insurance and Bram Indus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Bram Indus 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 Bram Indus will offset losses from the drop in Bram Indus' long position.| Libra Insurance vs. Magic Software Enterprises | Libra Insurance vs. More Mutual Funds | Libra Insurance vs. Bezeq Israeli Telecommunication | Libra Insurance vs. Rapac Communication Infrastructure |
| Bram Indus vs. Aura Investments | Bram Indus vs. Clal Biotechnology Industries | Bram Indus vs. One Software Technologies | Bram Indus vs. Oron Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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