Correlation Between Central Reinsurance and Yuan High
Can any of the company-specific risk be diversified away by investing in both Central Reinsurance and Yuan High 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 Yuan High 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 Yuan High Tech Development, you can compare the effects of market volatilities on Central Reinsurance and Yuan High 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 Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Reinsurance and Yuan High.
Diversification Opportunities for Central Reinsurance and Yuan High
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Central and Yuan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Central Reinsurance Corp and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech 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 Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of Central Reinsurance i.e., Central Reinsurance and Yuan High go up and down completely randomly.
Pair Corralation between Central Reinsurance and Yuan High
Assuming the 90 days trading horizon Central Reinsurance Corp is expected to under-perform the Yuan High. But the stock apears to be less risky and, when comparing its historical volatility, Central Reinsurance Corp is 3.04 times less risky than Yuan High. The stock trades about 0.0 of its potential returns per unit of risk. The Yuan High Tech Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,578 in Yuan High Tech Development on October 13, 2024 and sell it today you would earn a total of 3,572 from holding Yuan High Tech Development or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Reinsurance Corp vs. Yuan High Tech Development
Performance |
| Timeline |
| Central Reinsurance Corp |
| Yuan High Tech |
Central Reinsurance and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Reinsurance and Yuan High
The main advantage of trading using opposite Central Reinsurance and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Reinsurance position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High's long position.| Central Reinsurance vs. Mega Financial Holding | Central Reinsurance vs. ESUN Financial Holding | Central Reinsurance vs. Taiwan Cooperative Financial |
| Yuan High vs. Loop Telecommunication International | Yuan High vs. Adata Technology Co | Yuan High vs. K Way Information | Yuan High vs. Oceanic Beverages Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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