Correlation Between SBI Life and MIC Electronics
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By analyzing existing cross correlation between SBI Life Insurance and MIC Electronics Limited, you can compare the effects of market volatilities on SBI Life and MIC Electronics 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 MIC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Life and MIC Electronics.
Diversification Opportunities for SBI Life and MIC Electronics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and MIC is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SBI Life Insurance and MIC Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIC Electronics 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 MIC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIC Electronics has no effect on the direction of SBI Life i.e., SBI Life and MIC Electronics go up and down completely randomly.
Pair Corralation between SBI Life and MIC Electronics
Assuming the 90 days trading horizon SBI Life Insurance is expected to generate 0.53 times more return on investment than MIC Electronics. However, SBI Life Insurance is 1.9 times less risky than MIC Electronics. It trades about 0.17 of its potential returns per unit of risk. MIC Electronics Limited is currently generating about -0.23 per unit of risk. If you would invest 142,165 in SBI Life Insurance on October 15, 2024 and sell it today you would earn a total of 5,665 from holding SBI Life Insurance or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
SBI Life Insurance vs. MIC Electronics Limited
Performance |
| Timeline |
| SBI Life Insurance |
| MIC Electronics |
SBI Life and MIC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Life and MIC Electronics
The main advantage of trading using opposite SBI Life and MIC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Life position performs unexpectedly, MIC Electronics 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 MIC Electronics will offset losses from the drop in MIC Electronics' long position.| SBI Life vs. Sintex Plastics Technology | SBI Life vs. Kilitch Drugs Limited | SBI Life vs. Bigbloc Construction Limited | SBI Life vs. Usha Martin Education |
| MIC Electronics vs. HT Media Limited | MIC Electronics vs. Zee Entertainment Enterprises | MIC Electronics vs. Next Mediaworks Limited | MIC Electronics vs. SBI Life Insurance |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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