Correlation Between CIG PANNONIA and China Taiping
Can any of the company-specific risk be diversified away by investing in both CIG PANNONIA and China Taiping 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 CIG PANNONIA and China Taiping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIG PANNONIA LIFE and China Taiping Insurance, you can compare the effects of market volatilities on CIG PANNONIA and China Taiping 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 CIG PANNONIA with a short position of China Taiping. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIG PANNONIA and China Taiping.
Diversification Opportunities for CIG PANNONIA and China Taiping
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CIG and China is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CIG PANNONIA LIFE and China Taiping Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Taiping Insurance and CIG PANNONIA 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 CIG PANNONIA LIFE are associated (or correlated) with China Taiping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Taiping Insurance has no effect on the direction of CIG PANNONIA i.e., CIG PANNONIA and China Taiping go up and down completely randomly.
Pair Corralation between CIG PANNONIA and China Taiping
Assuming the 90 days trading horizon CIG PANNONIA LIFE is expected to generate 0.55 times more return on investment than China Taiping. However, CIG PANNONIA LIFE is 1.81 times less risky than China Taiping. It trades about 0.48 of its potential returns per unit of risk. China Taiping Insurance is currently generating about -0.09 per unit of risk. If you would invest 85.00 in CIG PANNONIA LIFE on October 25, 2024 and sell it today you would earn a total of 11.00 from holding CIG PANNONIA LIFE or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIG PANNONIA LIFE vs. China Taiping Insurance
Performance |
| Timeline |
| CIG PANNONIA LIFE |
| China Taiping Insurance |
CIG PANNONIA and China Taiping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIG PANNONIA and China Taiping
The main advantage of trading using opposite CIG PANNONIA and China Taiping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIG PANNONIA position performs unexpectedly, China Taiping 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 China Taiping will offset losses from the drop in China Taiping's long position.| CIG PANNONIA vs. Diamyd Medical AB | CIG PANNONIA vs. Meli Hotels International | CIG PANNONIA vs. Park Hotels Resorts | CIG PANNONIA vs. Apollo Medical Holdings |
| China Taiping vs. TEXAS ROADHOUSE | China Taiping vs. Goosehead Insurance | China Taiping vs. G III Apparel Group | China Taiping vs. Transport International Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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