Correlation Between NRB Industrial and General Insurance
Can any of the company-specific risk be diversified away by investing in both NRB Industrial and General 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 NRB Industrial and General Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRB Industrial Bearings and General Insurance, you can compare the effects of market volatilities on NRB Industrial and General 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 NRB Industrial with a short position of General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRB Industrial and General Insurance.
Diversification Opportunities for NRB Industrial and General Insurance
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NRB and General is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NRB Industrial Bearings and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and NRB Industrial 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 NRB Industrial Bearings are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of NRB Industrial i.e., NRB Industrial and General Insurance go up and down completely randomly.
Pair Corralation between NRB Industrial and General Insurance
Assuming the 90 days trading horizon NRB Industrial Bearings is expected to under-perform the General Insurance. In addition to that, NRB Industrial is 1.0 times more volatile than General Insurance. It trades about -0.14 of its total potential returns per unit of risk. General Insurance is currently generating about 0.01 per unit of volatility. If you would invest 41,102 in General Insurance on November 2, 2024 and sell it today you would lose (1,032) from holding General Insurance or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRB Industrial Bearings vs. General Insurance
Performance |
| Timeline |
| NRB Industrial Bearings |
| General Insurance |
NRB Industrial and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRB Industrial and General Insurance
The main advantage of trading using opposite NRB Industrial and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRB Industrial position performs unexpectedly, General 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 General Insurance will offset losses from the drop in General Insurance's long position.| NRB Industrial vs. Embassy Office Parks | NRB Industrial vs. Nucleus Software Exports | NRB Industrial vs. Sonata Software Limited | NRB Industrial vs. Kaynes Technology India |
| General Insurance vs. Univa Foods Limited | General Insurance vs. Selan Exploration Technology | General Insurance vs. ADF Foods Limited | General Insurance vs. Kohinoor Foods 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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