Correlation Between SAL Steel and Life Insurance
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By analyzing existing cross correlation between SAL Steel Limited and Life Insurance, you can compare the effects of market volatilities on SAL Steel 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 SAL Steel with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Life Insurance.
Diversification Opportunities for SAL Steel and Life Insurance
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SAL and Life is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and SAL Steel 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 SAL Steel Limited 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 SAL Steel i.e., SAL Steel and Life Insurance go up and down completely randomly.
Pair Corralation between SAL Steel and Life Insurance
Assuming the 90 days trading horizon SAL Steel Limited is expected to under-perform the Life Insurance. In addition to that, SAL Steel is 2.46 times more volatile than Life Insurance. It trades about -0.13 of its total potential returns per unit of risk. Life Insurance is currently generating about -0.19 per unit of volatility. If you would invest 89,200 in Life Insurance on November 1, 2024 and sell it today you would lose (6,380) from holding Life Insurance or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Life Insurance
Performance |
| Timeline |
| SAL Steel Limited |
| Life Insurance |
SAL Steel and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Life Insurance
The main advantage of trading using opposite SAL Steel and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel 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.| SAL Steel vs. KNR Constructions Limited | SAL Steel vs. Oriental Hotels Limited | SAL Steel vs. Juniper Hotels | SAL Steel vs. Rajnandini Metal Limited |
| Life Insurance vs. Vardhman Special Steels | Life Insurance vs. NMDC Steel Limited | Life Insurance vs. SAL Steel Limited | Life Insurance vs. Kotak Mahindra Bank |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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