Correlation Between Life Insurance and Black Box
Can any of the company-specific risk be diversified away by investing in both Life Insurance and Black Box 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 Black Box into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Insurance and Black Box Limited, you can compare the effects of market volatilities on Life Insurance and Black Box 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 Black Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Black Box.
Diversification Opportunities for Life Insurance and Black Box
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Life and Black is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Black Box Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Box Limited 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 Black Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Box Limited has no effect on the direction of Life Insurance i.e., Life Insurance and Black Box go up and down completely randomly.
Pair Corralation between Life Insurance and Black Box
Assuming the 90 days trading horizon Life Insurance is expected to under-perform the Black Box. But the stock apears to be less risky and, when comparing its historical volatility, Life Insurance is 2.56 times less risky than Black Box. The stock trades about -0.07 of its potential returns per unit of risk. The Black Box Limited is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 45,640 in Black Box Limited on August 30, 2024 and sell it today you would earn a total of 14,635 from holding Black Box Limited or generate 32.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Insurance vs. Black Box Limited
Performance |
| Timeline |
| Life Insurance |
| Black Box Limited |
Life Insurance and Black Box Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Black Box
The main advantage of trading using opposite Life Insurance and Black Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Black Box 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 Black Box will offset losses from the drop in Black Box's long position.| Life Insurance vs. Kaushalya Infrastructure Development | Life Insurance vs. MMTC Limited | Life Insurance vs. Kingfa Science Technology | Life Insurance vs. Rico Auto Industries |
| Black Box vs. Sakar Healthcare Limited | Black Box vs. Apollo Hospitals Enterprise | Black Box vs. Metropolis Healthcare Limited | Black Box vs. Blue Jet Healthcare |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |