Correlation Between Life InsuranceOf and Aster DM

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Can any of the company-specific risk be diversified away by investing in both Life InsuranceOf and Aster DM 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 InsuranceOf and Aster DM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Insurance and Aster DM Healthcare, you can compare the effects of market volatilities on Life InsuranceOf and Aster DM 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 InsuranceOf with a short position of Aster DM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life InsuranceOf and Aster DM.

Diversification Opportunities for Life InsuranceOf and Aster DM

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Life and Aster is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Aster DM Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aster DM Healthcare and Life InsuranceOf 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 Aster DM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aster DM Healthcare has no effect on the direction of Life InsuranceOf i.e., Life InsuranceOf and Aster DM go up and down completely randomly.

Pair Corralation between Life InsuranceOf and Aster DM

Assuming the 90 days trading horizon Life Insurance is expected to generate 0.66 times more return on investment than Aster DM. However, Life Insurance is 1.52 times less risky than Aster DM. It trades about -0.2 of its potential returns per unit of risk. Aster DM Healthcare is currently generating about -0.32 per unit of risk. If you would invest  80,905  in Life Insurance on November 28, 2024 and sell it today you would lose (5,250) from holding Life Insurance or give up 6.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Life Insurance  vs.  Aster DM Healthcare

 Performance 
       Timeline  
Life InsuranceOf 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Aster DM Healthcare 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Aster DM Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Life InsuranceOf and Aster DM Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Life InsuranceOf and Aster DM

The main advantage of trading using opposite Life InsuranceOf and Aster DM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life InsuranceOf position performs unexpectedly, Aster DM 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 Aster DM will offset losses from the drop in Aster DM's long position.
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The idea behind Life Insurance and Aster DM Healthcare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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