Correlation Between Data Patterns and General Insurance

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

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

Diversification Opportunities for Data Patterns and General Insurance

0.0

Correlation Coefficient

Data Patterns  General Insurance

Pay attention - limited upside

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

Pair Corralation between Data Patterns and General Insurance

Assuming the 90 days trading horizon Data Patterns Limited is expected to under-perform the General Insurance. In addition to that, Data Patterns is 1.99 times more volatile than General Insurance. It trades about -0.01 of its total potential returns per unit of risk. General Insurance is currently generating about 0.06 per unit of volatility. If you would invest  36,673  in General Insurance on July 10, 2025 and sell it today you would earn a total of  1,602  from holding General Insurance or generate 4.37% return on investment over 90 days.

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

Data Patterns Limited  vs.  General Insurance

Data Patterns Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Data Patterns Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Data Patterns is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

General Insurance

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in General Insurance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, General Insurance is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Data Patterns and General Insurance

The main advantage of trading using opposite Data Patterns and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Patterns 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 Data Patterns Limited 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..