Correlation Between SBI Life and REC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SBI Life and REC 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 REC 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 REC Limited, you can compare the effects of market volatilities on SBI Life and REC 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 REC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Life and REC.

Diversification Opportunities for SBI Life and REC

-0.14
  Correlation Coefficient
 REC

Good diversification

The 3 months correlation between SBI and REC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SBI Life Insurance and REC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REC 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 REC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REC Limited has no effect on the direction of SBI Life i.e., SBI Life and REC go up and down completely randomly.

Pair Corralation between SBI Life and REC

Assuming the 90 days trading horizon SBI Life is expected to generate 2.32 times less return on investment than REC. But when comparing it to its historical volatility, SBI Life Insurance is 1.51 times less risky than REC. It trades about 0.18 of its potential returns per unit of risk. REC Limited is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  39,170  in REC Limited on December 24, 2024 and sell it today you would earn a total of  5,275  from holding REC Limited or generate 13.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SBI Life Insurance  vs.  REC Limited

 Performance 
       Timeline  
SBI Life Insurance 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SBI Life Insurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, SBI Life exhibited solid returns over the last few months and may actually be approaching a breakup point.
REC Limited 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days REC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SBI Life and REC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SBI Life and REC

The main advantage of trading using opposite SBI Life and REC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Life position performs unexpectedly, REC 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 REC will offset losses from the drop in REC's long position.
SBI Life vs. Kalyani Steels Limited
SBI Life vs. Jindal Poly Investment
SBI Life vs. Speciality Restaurants Limited
SBI Life vs. Electrosteel Castings Limited
The idea behind SBI Life Insurance and REC 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.
REC vs. Entero Healthcare Solutions
REC vs. UTI Asset Management
REC vs. Sri Havisha Hospitality
REC vs. Healthcare Global Enterprises
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Volatility Analysis
Get historical volatility and risk analysis based on latest market data


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY