Correlation Between Life Insurance and Power FinanceLimited
Can any of the company-specific risk be diversified away by investing in both Life Insurance and Power FinanceLimited 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 Power FinanceLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Insurance and Power Finance, you can compare the effects of market volatilities on Life Insurance and Power FinanceLimited 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 Power FinanceLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Power FinanceLimited.
Diversification Opportunities for Life Insurance and Power FinanceLimited
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Life and Power is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power FinanceLimited 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 Power FinanceLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power FinanceLimited has no effect on the direction of Life Insurance i.e., Life Insurance and Power FinanceLimited go up and down completely randomly.
Pair Corralation between Life Insurance and Power FinanceLimited
Assuming the 90 days trading horizon Life Insurance is expected to under-perform the Power FinanceLimited. But the stock apears to be less risky and, when comparing its historical volatility, Life Insurance is 1.52 times less risky than Power FinanceLimited. The stock trades about -0.17 of its potential returns per unit of risk. The Power Finance is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 39,655 in Power Finance on December 10, 2024 and sell it today you would earn a total of 455.00 from holding Power Finance or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Insurance vs. Power Finance
Performance |
| Timeline |
| Life Insurance |
| Power FinanceLimited |
Life Insurance and Power FinanceLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Power FinanceLimited
The main advantage of trading using opposite Life Insurance and Power FinanceLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Power FinanceLimited 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 Power FinanceLimited will offset losses from the drop in Power FinanceLimited's long position.| Life Insurance vs. Servotech Power Systems | ||
| Life Insurance vs. Paramount Communications Limited | ||
| Life Insurance vs. Rossari Biotech Limited | ||
| Life Insurance vs. Sonata Software Limited |
| Power FinanceLimited vs. LT Technology Services | ||
| Power FinanceLimited vs. Sonata Software Limited | ||
| Power FinanceLimited vs. Next Mediaworks Limited | ||
| Power FinanceLimited vs. DJ Mediaprint Logistics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world |