Correlation Between SBI Life and MRF
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By analyzing existing cross correlation between SBI Life Insurance and MRF Limited, you can compare the effects of market volatilities on SBI Life and MRF 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 MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Life and MRF.
Diversification Opportunities for SBI Life and MRF
Excellent diversification
The 3 months correlation between SBI and MRF is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SBI Life Insurance and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited 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 MRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRF Limited has no effect on the direction of SBI Life i.e., SBI Life and MRF go up and down completely randomly.
Pair Corralation between SBI Life and MRF
Assuming the 90 days trading horizon SBI Life Insurance is expected to generate 1.14 times more return on investment than MRF. However, SBI Life is 1.14 times more volatile than MRF Limited. It trades about 0.05 of its potential returns per unit of risk. MRF Limited is currently generating about 0.04 per unit of risk. If you would invest 112,453 in SBI Life Insurance on November 27, 2024 and sell it today you would earn a total of 36,197 from holding SBI Life Insurance or generate 32.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
SBI Life Insurance vs. MRF Limited
Performance |
| Timeline |
| SBI Life Insurance |
| MRF Limited |
SBI Life and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Life and MRF
The main advantage of trading using opposite SBI Life and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Life position performs unexpectedly, MRF 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 MRF will offset losses from the drop in MRF's long position.| SBI Life vs. Spencers Retail Limited | SBI Life vs. POWERGRID Infrastructure Investment | SBI Life vs. Hexa Tradex Limited | SBI Life vs. The State Trading |
| MRF vs. TVS Electronics Limited | MRF vs. Nucleus Software Exports | MRF vs. MIC Electronics Limited | MRF vs. Modi Rubber 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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