Correlation Between Libra Insurance and Upsellon Brands

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

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

Diversification Opportunities for Libra Insurance and Upsellon Brands

-0.34

Correlation Coefficient

Libra Insurance  Upsellon Brands

Very good diversification

The 3 months correlation between Libra and Upsellon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Upsellon Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsellon Brands Holdings and Libra Insurance 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 Libra Insurance are associated (or correlated) with Upsellon Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsellon Brands Holdings has no effect on the direction of Libra Insurance i.e., Libra Insurance and Upsellon Brands go up and down completely randomly.

Pair Corralation between Libra Insurance and Upsellon Brands

Assuming the 90 days trading horizon Libra Insurance is expected to under-perform the Upsellon Brands. But the stock apears to be less risky and, when comparing its historical volatility, Libra Insurance is 2.89 times less risky than Upsellon Brands. The stock trades about -0.17 of its potential returns per unit of risk. The Upsellon Brands Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  9,710  in Upsellon Brands Holdings on January 29, 2024 and sell it today you would earn a total of  1,290  from holding Upsellon Brands Holdings or generate 13.29% return on investment over 90 days.

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

Libra Insurance  vs.  Upsellon Brands Holdings

Libra Insurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Libra Insurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Libra Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Upsellon Brands Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Upsellon Brands Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Upsellon Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Libra Insurance and Upsellon Brands

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

The idea behind Libra Insurance and Upsellon Brands Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.