Correlation Between SUN ART and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both SUN ART and SBI Insurance 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 SUN ART and SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN ART RETAIL and SBI Insurance Group, you can compare the effects of market volatilities on SUN ART and SBI 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 SUN ART with a short position of SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and SBI Insurance.
Diversification Opportunities for SUN ART and SBI Insurance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SUN and SBI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group and SUN ART 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 SUN ART RETAIL are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of SUN ART i.e., SUN ART and SBI Insurance go up and down completely randomly.
Pair Corralation between SUN ART and SBI Insurance
Assuming the 90 days trading horizon SUN ART RETAIL is expected to generate 4.16 times more return on investment than SBI Insurance. However, SUN ART is 4.16 times more volatile than SBI Insurance Group. It trades about 0.07 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.0 per unit of risk. If you would invest 7.58 in SUN ART RETAIL on October 16, 2024 and sell it today you would earn a total of 13.42 from holding SUN ART RETAIL or generate 177.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN ART RETAIL vs. SBI Insurance Group
Performance |
| Timeline |
| SUN ART RETAIL |
| SBI Insurance Group |
SUN ART and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN ART and SBI Insurance
The main advantage of trading using opposite SUN ART and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART position performs unexpectedly, SBI 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| SUN ART vs. SBI Insurance Group | SUN ART vs. Silicon Motion Technology | SUN ART vs. INSURANCE AUST GRP | SUN ART vs. Siamgas And Petrochemicals |
| SBI Insurance vs. GLG LIFE TECH | SBI Insurance vs. NetSol Technologies | SBI Insurance vs. SLR Investment Corp | SBI Insurance vs. Sunny Optical Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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