Correlation Between SBI Life and AXISCADES Technologies

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Can any of the company-specific risk be diversified away by investing in both SBI Life and AXISCADES Technologies 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 SBI Life and AXISCADES Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Life Insurance and AXISCADES Technologies Limited, you can compare the effects of market volatilities on SBI Life and AXISCADES Technologies 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 SBI Life with a short position of AXISCADES Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Life and AXISCADES Technologies.

Diversification Opportunities for SBI Life and AXISCADES Technologies

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between SBI and AXISCADES is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SBI Life Insurance and AXISCADES Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXISCADES Technologies and SBI Life 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 SBI Life Insurance are associated (or correlated) with AXISCADES Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXISCADES Technologies has no effect on the direction of SBI Life i.e., SBI Life and AXISCADES Technologies go up and down completely randomly.

Pair Corralation between SBI Life and AXISCADES Technologies

Assuming the 90 days trading horizon SBI Life is expected to generate 6.07 times less return on investment than AXISCADES Technologies. But when comparing it to its historical volatility, SBI Life Insurance is 2.32 times less risky than AXISCADES Technologies. It trades about 0.03 of its potential returns per unit of risk. AXISCADES Technologies Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  32,615  in AXISCADES Technologies Limited on October 14, 2024 and sell it today you would earn a total of  45,040  from holding AXISCADES Technologies Limited or generate 138.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

SBI Life Insurance  vs.  AXISCADES Technologies Limited

 Performance 
       Timeline  
SBI Life Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SBI Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
AXISCADES Technologies 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in AXISCADES Technologies Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, AXISCADES Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

SBI Life and AXISCADES Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SBI Life and AXISCADES Technologies

The main advantage of trading using opposite SBI Life and AXISCADES Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Life position performs unexpectedly, AXISCADES Technologies 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 AXISCADES Technologies will offset losses from the drop in AXISCADES Technologies' long position.
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The idea behind SBI Life Insurance and AXISCADES Technologies Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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