Correlation Between Life Insurance and Timken
Can any of the company-specific risk be diversified away by investing in both Life Insurance and Timken 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 Timken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Insurance and Timken Company, you can compare the effects of market volatilities on Life Insurance and Timken 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 Timken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Insurance and Timken.
Diversification Opportunities for Life Insurance and Timken
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Life and Timken is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and Timken Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timken Company 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 Timken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timken Company has no effect on the direction of Life Insurance i.e., Life Insurance and Timken go up and down completely randomly.
Pair Corralation between Life Insurance and Timken
If you would invest 1,550 in Life Insurance on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Life Insurance or generate 0.0% 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. Timken Company
Performance |
| Timeline |
| Life Insurance |
| Timken Company |
Life Insurance and Timken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Insurance and Timken
The main advantage of trading using opposite Life Insurance and Timken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Insurance position performs unexpectedly, Timken 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 Timken will offset losses from the drop in Timken's long position.| Life Insurance vs. Videolocity International | Life Insurance vs. Everus Construction Group | Life Insurance vs. Zoom Video Communications | Life Insurance vs. Hunter Creek Mining |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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