Correlation Between Multi Retail and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Libra Insurance 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 Multi Retail and Libra Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Libra Insurance, you can compare the effects of market volatilities on Multi Retail and Libra Insurance 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 Multi Retail with a short position of Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Libra Insurance.
Diversification Opportunities for Multi Retail and Libra Insurance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and Libra is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance and Multi Retail 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 Multi Retail Group are associated (or correlated) with Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Multi Retail i.e., Multi Retail and Libra Insurance go up and down completely randomly.
Pair Corralation between Multi Retail and Libra Insurance
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 1.55 times more return on investment than Libra Insurance. However, Multi Retail is 1.55 times more volatile than Libra Insurance. It trades about 0.23 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.21 per unit of risk. If you would invest 20,790 in Multi Retail Group on September 20, 2024 and sell it today you would earn a total of 92,710 from holding Multi Retail Group or generate 445.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Libra Insurance
Performance |
| Timeline |
| Multi Retail Group |
| Libra Insurance |
Multi Retail and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Libra Insurance
The main advantage of trading using opposite Multi Retail and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Libra Insurance 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Multi Retail vs. Sure Tech Investments LP | Multi Retail vs. Iargento Hi Tech | Multi Retail vs. Clal Insurance Enterprises | Multi Retail vs. TAT Technologies |
| Libra Insurance vs. IBI Mutual Funds | Libra Insurance vs. Petrochemical | Libra Insurance vs. Hiron Trade Investments Industrial | Libra Insurance vs. YD More Investments |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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