Correlation Between Sonata Software and Life Insurance
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By analyzing existing cross correlation between Sonata Software Limited and Life Insurance, you can compare the effects of market volatilities on Sonata Software 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 Sonata Software with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and Life Insurance.
Diversification Opportunities for Sonata Software and Life Insurance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sonata and Life is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Sonata Software 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 Sonata Software 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 Sonata Software i.e., Sonata Software and Life Insurance go up and down completely randomly.
Pair Corralation between Sonata Software and Life Insurance
Assuming the 90 days trading horizon Sonata Software Limited is expected to generate 1.74 times more return on investment than Life Insurance. However, Sonata Software is 1.74 times more volatile than Life Insurance. It trades about 0.11 of its potential returns per unit of risk. Life Insurance is currently generating about -0.03 per unit of risk. If you would invest 61,960 in Sonata Software Limited on September 13, 2024 and sell it today you would earn a total of 6,355 from holding Sonata Software Limited or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Sonata Software Limited vs. Life Insurance
Performance |
| Timeline |
| Sonata Software |
| Life Insurance |
Sonata Software and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and Life Insurance
The main advantage of trading using opposite Sonata Software and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software 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.| Sonata Software vs. Vodafone Idea Limited | Sonata Software vs. Yes Bank Limited | Sonata Software vs. Indian Overseas Bank | Sonata Software vs. Indian Oil |
| Life Insurance vs. Vodafone Idea Limited | Life Insurance vs. Yes Bank Limited | Life Insurance vs. Indian Overseas Bank | Life Insurance vs. Indian Oil |
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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