Correlation Between Oil Natural and Life Insurance
Can any of the company-specific risk be diversified away by investing in both Oil Natural and Life 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 Oil Natural and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Natural Gas and Life Insurance, you can compare the effects of market volatilities on Oil Natural and Life 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 Oil Natural with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Natural and Life Insurance.
Diversification Opportunities for Oil Natural and Life Insurance
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oil and Life is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Oil Natural Gas and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Oil Natural 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 Oil Natural Gas are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Oil Natural i.e., Oil Natural and Life Insurance go up and down completely randomly.
Pair Corralation between Oil Natural and Life Insurance
Assuming the 90 days trading horizon Oil Natural Gas is expected to generate 1.16 times more return on investment than Life Insurance. However, Oil Natural is 1.16 times more volatile than Life Insurance. It trades about 0.09 of its potential returns per unit of risk. Life Insurance is currently generating about -0.09 per unit of risk. 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 |
Oil Natural Gas vs. Life Insurance
Performance |
| Timeline |
| Oil Natural Gas |
| Life Insurance |
Oil Natural and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Natural and Life Insurance
The main advantage of trading using opposite Oil Natural and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Natural position performs unexpectedly, Life 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| Oil Natural vs. Teamlease Services Limited | Oil Natural vs. Garuda Construction Engineering | Oil Natural vs. Punjab National Bank | Oil Natural vs. Man Infraconstruction Limited |
| Life Insurance vs. Vodafone Idea Limited | Life Insurance vs. Yes Bank Limited | Life Insurance vs. Indian Overseas Bank | Life Insurance vs. Indian Oil |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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