Correlation Between SBI Life and Data Patterns

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

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

Diversification Opportunities for SBI Life and Data Patterns

-0.23

Correlation Coefficient

SBI Life  Data Patterns

Very good diversification

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

Pair Corralation between SBI Life and Data Patterns

Assuming the 90 days trading horizon SBI Life is expected to generate 10.81 times less return on investment than Data Patterns. But when comparing it to its historical volatility, SBI Life Insurance is 2.72 times less risky than Data Patterns. It trades about 0.01 of its potential returns per unit of risk. Data Patterns Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  266,939  in Data Patterns Limited on July 25, 2025 and sell it today you would earn a total of  17,261  from holding Data Patterns Limited or generate 6.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SBI Life Insurance  vs.  Data Patterns Limited

SBI Life Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Life Insurance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, SBI Life is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Data Patterns Limited

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Data Patterns Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Data Patterns may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with SBI Life and Data Patterns

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

The idea behind SBI Life Insurance and Data Patterns Limited 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 CEOs Directory module to screen CEOs from public companies around the world.