Correlation Between Libra Insurance and Satcom Systems
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Satcom Systems 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 Satcom Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Satcom Systems, you can compare the effects of market volatilities on Libra Insurance and Satcom Systems 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 Satcom Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Satcom Systems.
Diversification Opportunities for Libra Insurance and Satcom Systems
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Libra and Satcom is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Satcom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satcom Systems 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 Satcom Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satcom Systems has no effect on the direction of Libra Insurance i.e., Libra Insurance and Satcom Systems go up and down completely randomly.
Pair Corralation between Libra Insurance and Satcom Systems
Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.82 times more return on investment than Satcom Systems. However, Libra Insurance is 1.22 times less risky than Satcom Systems. It trades about 0.26 of its potential returns per unit of risk. Satcom Systems is currently generating about 0.07 per unit of risk. If you would invest 49,035 in Libra Insurance on August 29, 2024 and sell it today you would earn a total of 33,675 from holding Libra Insurance or generate 68.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libra Insurance vs. Satcom Systems
Performance |
| Timeline |
| Libra Insurance |
| Satcom Systems |
Libra Insurance and Satcom Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libra Insurance and Satcom Systems
The main advantage of trading using opposite Libra Insurance and Satcom Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Satcom Systems 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 Satcom Systems will offset losses from the drop in Satcom Systems' long position.| Libra Insurance vs. Opal Balance | Libra Insurance vs. B Communications | Libra Insurance vs. Holmes Place International | Libra Insurance vs. Nova |
| Satcom Systems vs. Israel China Biotechnology | Satcom Systems vs. Elbit Medical Technologies | Satcom Systems vs. Ilex Medical | Satcom Systems vs. Imed Infinity Medical Limited |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets |