Correlation Between Interlife General and Public Power

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

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

Diversification Opportunities for Interlife General and Public Power

-0.02

Correlation Coefficient

Interlife General  Public Power

Good diversification

The 3 months correlation between Interlife and Public is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Interlife General Insurance and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power and Interlife General 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 Interlife General Insurance are associated (or correlated) with Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of Interlife General i.e., Interlife General and Public Power go up and down completely randomly.

Pair Corralation between Interlife General and Public Power

Assuming the 90 days trading horizon Interlife General is expected to generate 1.48 times less return on investment than Public Power. In addition to that, Interlife General is 1.0 times more volatile than Public Power. It trades about 0.08 of its total potential returns per unit of risk. Public Power is currently generating about 0.12 per unit of volatility. If you would invest  1,298  in Public Power on April 23, 2025 and sell it today you would earn a total of  119.00  from holding Public Power or generate 9.17% return on investment over 90 days.

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

Interlife General Insurance  vs.  Public Power

Interlife General

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interlife General Insurance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Interlife General is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Public Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Interlife General and Public Power

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

The idea behind Interlife General Insurance and Public Power 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.