Correlation Between Life Insurance and Amber Enterprises
Can any of the company-specific risk be diversified away by investing in both Life Insurance and Amber Enterprises 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 Life Insurance and Amber Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Insurance and Amber Enterprises India, you can compare the effects of market volatilities on Life Insurance and Amber Enterprises 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 Life Insurance with a short position of Amber Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Amber Enterprises.
Diversification Opportunities for Life Insurance and Amber Enterprises
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Life and Amber is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Amber Enterprises India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amber Enterprises India and Life 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 Life Insurance are associated (or correlated) with Amber Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amber Enterprises India has no effect on the direction of Life Insurance i.e., Life Insurance and Amber Enterprises go up and down completely randomly.
Pair Corralation between Life Insurance and Amber Enterprises
Assuming the 90 days trading horizon Life Insurance is expected to generate 2.79 times less return on investment than Amber Enterprises. But when comparing it to its historical volatility, Life Insurance is 1.34 times less risky than Amber Enterprises. It trades about 0.05 of its potential returns per unit of risk. Amber Enterprises India is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 187,020 in Amber Enterprises India on September 13, 2024 and sell it today you would earn a total of 392,295 from holding Amber Enterprises India or generate 209.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Insurance vs. Amber Enterprises India
Performance |
| Timeline |
| Life Insurance |
| Amber Enterprises India |
Life Insurance and Amber Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Amber Enterprises
The main advantage of trading using opposite Life Insurance and Amber Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Amber Enterprises 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 Amber Enterprises will offset losses from the drop in Amber Enterprises' long position.| Life Insurance vs. Vodafone Idea Limited | Life Insurance vs. Yes Bank Limited | Life Insurance vs. Indian Overseas Bank | Life Insurance vs. Indian Oil |
| Amber Enterprises vs. Baazar Style Retail | Amber Enterprises vs. General Insurance | Amber Enterprises vs. Alkali Metals Limited | Amber Enterprises vs. Life 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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