Correlation Between Libra Insurance and Opal Balance
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Opal Balance 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 Opal Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Opal Balance, you can compare the effects of market volatilities on Libra Insurance and Opal Balance 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 Opal Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Opal Balance.
Diversification Opportunities for Libra Insurance and Opal Balance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Libra and Opal is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance 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 Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Libra Insurance i.e., Libra Insurance and Opal Balance go up and down completely randomly.
Pair Corralation between Libra Insurance and Opal Balance
Assuming the 90 days trading horizon Libra Insurance is expected to generate 1.9 times more return on investment than Opal Balance. However, Libra Insurance is 1.9 times more volatile than Opal Balance. It trades about 0.36 of its potential returns per unit of risk. Opal Balance is currently generating about 0.23 per unit of risk. If you would invest 72,004 in Libra Insurance on September 1, 2024 and sell it today you would earn a total of 15,286 from holding Libra Insurance or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Opal Balance
Performance |
| Timeline |
| Libra Insurance |
| Opal Balance |
Libra Insurance and Opal Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Opal Balance
The main advantage of trading using opposite Libra Insurance and Opal Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Opal Balance 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 Opal Balance will offset losses from the drop in Opal Balance's long position.| Libra Insurance vs. Brainsway | Libra Insurance vs. Mivne Real Estate | Libra Insurance vs. Photomyne | Libra Insurance vs. Israel Land Development |
| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
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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