Correlation Between Life Insurance and Centum Electronics
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By analyzing existing cross correlation between Life Insurance and Centum Electronics Limited, you can compare the effects of market volatilities on Life Insurance and Centum Electronics 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 Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Centum Electronics.
Diversification Opportunities for Life Insurance and Centum Electronics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Life and Centum is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics 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 Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of Life Insurance i.e., Life Insurance and Centum Electronics go up and down completely randomly.
Pair Corralation between Life Insurance and Centum Electronics
Assuming the 90 days trading horizon Life Insurance is expected to generate 2.99 times less return on investment than Centum Electronics. But when comparing it to its historical volatility, Life Insurance is 1.67 times less risky than Centum Electronics. It trades about 0.04 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 55,721 in Centum Electronics Limited on August 30, 2024 and sell it today you would earn a total of 95,384 from holding Centum Electronics Limited or generate 171.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Life Insurance vs. Centum Electronics Limited
Performance |
| Timeline |
| Life Insurance |
| Centum Electronics |
Life Insurance and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Centum Electronics
The main advantage of trading using opposite Life Insurance and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Centum Electronics 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| Life Insurance vs. MRF Limited | Life Insurance vs. Nalwa Sons Investments | Life Insurance vs. Vardhman Holdings Limited |
| Centum Electronics vs. Reliance Industries Limited | Centum Electronics vs. Life Insurance | Centum Electronics vs. India Glycols Limited | Centum Electronics vs. Indo Borax Chemicals |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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