Correlation Between Life Insurance and Bank of Maharashtra
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By analyzing existing cross correlation between Life Insurance and Bank of Maharashtra, you can compare the effects of market volatilities on Life Insurance and Bank of Maharashtra 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 Bank of Maharashtra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Bank of Maharashtra.
Diversification Opportunities for Life Insurance and Bank of Maharashtra
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Life and Bank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Bank of Maharashtra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Maharashtra 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 Bank of Maharashtra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Maharashtra has no effect on the direction of Life Insurance i.e., Life Insurance and Bank of Maharashtra go up and down completely randomly.
Pair Corralation between Life Insurance and Bank of Maharashtra
Assuming the 90 days trading horizon Life Insurance is expected to under-perform the Bank of Maharashtra. But the stock apears to be less risky and, when comparing its historical volatility, Life Insurance is 2.24 times less risky than Bank of Maharashtra. The stock trades about -0.2 of its potential returns per unit of risk. The Bank of Maharashtra is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 5,365 in Bank of Maharashtra on October 25, 2024 and sell it today you would lose (346.00) from holding Bank of Maharashtra or give up 6.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Insurance vs. Bank of Maharashtra
Performance |
| Timeline |
| Life Insurance |
| Bank of Maharashtra |
Life Insurance and Bank of Maharashtra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Bank of Maharashtra
The main advantage of trading using opposite Life Insurance and Bank of Maharashtra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Bank of Maharashtra 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 Bank of Maharashtra will offset losses from the drop in Bank of Maharashtra's long position.| Life Insurance vs. State Bank of | Life Insurance vs. HDFC Bank Limited | Life Insurance vs. ICICI Bank Limited | Life Insurance vs. Reliance Industries Limited |
| Bank of Maharashtra vs. State Bank of | Bank of Maharashtra vs. Life Insurance | Bank of Maharashtra vs. HDFC Bank Limited | Bank of Maharashtra vs. ICICI Bank 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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