Correlation Between Eastern Silk and Life Insurance

Can any of the company-specific risk be diversified away by investing in both Eastern Silk and Life 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 Eastern Silk and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastern Silk Industries and Life Insurance, you can compare the effects of market volatilities on Eastern Silk 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 Eastern Silk with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Silk and Life Insurance.

Diversification Opportunities for Eastern Silk and Life Insurance

0.0

Correlation Coefficient

Eastern Silk  Life Insurance

Pay attention - limited upside

The 3 months correlation between Eastern and Life is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Silk Industries and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Eastern Silk 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 Eastern Silk Industries 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 Eastern Silk i.e., Eastern Silk and Life Insurance go up and down completely randomly.

Pair Corralation between Eastern Silk and Life Insurance

If you would invest  180.00  in Eastern Silk Industries on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Eastern Silk Industries or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Eastern Silk Industries  vs.  Life Insurance

Eastern Silk Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Silk Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Eastern Silk is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Life Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Eastern Silk and Life Insurance

The main advantage of trading using opposite Eastern Silk and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Silk 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.

The idea behind Eastern Silk Industries and Life Insurance 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.