Correlation Between Le Travenues and General Insurance

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

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

Diversification Opportunities for Le Travenues and General Insurance

0.23

Correlation Coefficient

Le Travenues  General Insurance

Modest diversification

The 3 months correlation between IXIGO and General is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Le Travenues Technology and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and Le Travenues 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 Le Travenues Technology are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Le Travenues i.e., Le Travenues and General Insurance go up and down completely randomly.

Pair Corralation between Le Travenues and General Insurance

Assuming the 90 days trading horizon Le Travenues is expected to generate 3.59 times less return on investment than General Insurance. In addition to that, Le Travenues is 1.5 times more volatile than General Insurance. It trades about 0.13 of its total potential returns per unit of risk. General Insurance is currently generating about 0.68 per unit of volatility. If you would invest  35,815  in General Insurance on September 18, 2024 and sell it today you would earn a total of  8,430  from holding General Insurance or generate 23.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Le Travenues Technology  vs.  General Insurance

Le Travenues Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Le Travenues Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Le Travenues is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

General Insurance

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in General Insurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, General Insurance displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Le Travenues and General Insurance

The main advantage of trading using opposite Le Travenues and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Le Travenues position performs unexpectedly, General 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 General Insurance will offset losses from the drop in General Insurance's long position.

The idea behind Le Travenues Technology and General 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 Commodity Directory module to find actively traded commodities issued by global exchanges.