Correlation Between Central Reinsurance and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both Central Reinsurance and Yageo Corp 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 Central Reinsurance and Yageo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Reinsurance Corp and Yageo Corp, you can compare the effects of market volatilities on Central Reinsurance and Yageo Corp 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 Central Reinsurance with a short position of Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Reinsurance and Yageo Corp.
Diversification Opportunities for Central Reinsurance and Yageo Corp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Central and Yageo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Central Reinsurance Corp and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp and Central Reinsurance 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 Central Reinsurance Corp are associated (or correlated) with Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of Central Reinsurance i.e., Central Reinsurance and Yageo Corp go up and down completely randomly.
Pair Corralation between Central Reinsurance and Yageo Corp
Assuming the 90 days trading horizon Central Reinsurance Corp is expected to generate 0.57 times more return on investment than Yageo Corp. However, Central Reinsurance Corp is 1.76 times less risky than Yageo Corp. It trades about -0.13 of its potential returns per unit of risk. Yageo Corp is currently generating about -0.3 per unit of risk. If you would invest 2,725 in Central Reinsurance Corp on August 29, 2024 and sell it today you would lose (85.00) from holding Central Reinsurance Corp or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Central Reinsurance Corp vs. Yageo Corp
Performance |
| Timeline |
| Central Reinsurance Corp |
| Yageo Corp |
Central Reinsurance and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Reinsurance and Yageo Corp
The main advantage of trading using opposite Central Reinsurance and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Reinsurance position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| Central Reinsurance vs. Hi Lai Foods Co | Central Reinsurance vs. Loop Telecommunication International | Central Reinsurance vs. China Mobile | Central Reinsurance vs. Hunya Foods Co |
| Yageo Corp vs. Novatek Microelectronics Corp | Yageo Corp vs. Sitronix Technology Corp | Yageo Corp vs. Elan Microelectronics Corp | Yageo Corp vs. Global Unichip Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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