Correlation Between Victory Supermarket and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Victory Supermarket and Libra 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 Victory Supermarket and Libra Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Supermarket Chain and Libra Insurance, you can compare the effects of market volatilities on Victory Supermarket and Libra 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 Victory Supermarket with a short position of Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Supermarket and Libra Insurance.
Diversification Opportunities for Victory Supermarket and Libra Insurance
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Victory and Libra is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Victory Supermarket Chain and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance and Victory Supermarket 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 Victory Supermarket Chain are associated (or correlated) with Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Victory Supermarket i.e., Victory Supermarket and Libra Insurance go up and down completely randomly.
Pair Corralation between Victory Supermarket and Libra Insurance
Assuming the 90 days trading horizon Victory Supermarket is expected to generate 1.78 times less return on investment than Libra Insurance. But when comparing it to its historical volatility, Victory Supermarket Chain is 1.24 times less risky than Libra Insurance. It trades about 0.31 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 54,970 in Libra Insurance on August 29, 2024 and sell it today you would earn a total of 27,740 from holding Libra Insurance or generate 50.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Supermarket Chain vs. Libra Insurance
Performance |
| Timeline |
| Victory Supermarket Chain |
| Libra Insurance |
Victory Supermarket and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Supermarket and Libra Insurance
The main advantage of trading using opposite Victory Supermarket and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Supermarket position performs unexpectedly, Libra 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Victory Supermarket vs. Strauss Group | Victory Supermarket vs. B Communications | Victory Supermarket vs. Holmes Place International | Victory Supermarket vs. Nova |
| Libra Insurance vs. Opal Balance | Libra Insurance vs. B Communications | Libra Insurance vs. Holmes Place International | Libra Insurance vs. Nova |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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