Correlation Between Life Insurance and Oil Natural
Can any of the company-specific risk be diversified away by investing in both Life Insurance and Oil Natural 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 Oil Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Insurance and Oil Natural Gas, you can compare the effects of market volatilities on Life Insurance and Oil Natural 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 Oil Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Oil Natural.
Diversification Opportunities for Life Insurance and Oil Natural
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Life and Oil is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Oil Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Natural Gas 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 Oil Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Natural Gas has no effect on the direction of Life Insurance i.e., Life Insurance and Oil Natural go up and down completely randomly.
Pair Corralation between Life Insurance and Oil Natural
Assuming the 90 days trading horizon Life Insurance is expected to under-perform the Oil Natural. But the stock apears to be less risky and, when comparing its historical volatility, Life Insurance is 1.16 times less risky than Oil Natural. The stock trades about -0.09 of its potential returns per unit of risk. The Oil Natural Gas is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 25,436 in Oil Natural Gas on November 5, 2024 and sell it today you would earn a total of 825.00 from holding Oil Natural Gas or generate 3.24% 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. Oil Natural Gas
Performance |
| Timeline |
| Life Insurance |
| Oil Natural Gas |
Life Insurance and Oil Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Oil Natural
The main advantage of trading using opposite Life Insurance and Oil Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Oil Natural 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 Oil Natural will offset losses from the drop in Oil Natural's 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 |
| Oil Natural vs. Teamlease Services Limited | Oil Natural vs. Garuda Construction Engineering | Oil Natural vs. Punjab National Bank | Oil Natural vs. Man Infraconstruction 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 Directory module to find actively traded commodities issued by global exchanges.
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