Correlation Between OLD MUTUAL and CHINA PACINGRGDR5
Can any of the company-specific risk be diversified away by investing in both OLD MUTUAL and CHINA PACINGRGDR5 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 OLD MUTUAL and CHINA PACINGRGDR5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OLD MUTUAL LTD and CHINA PACINGRGDR5 YC1, you can compare the effects of market volatilities on OLD MUTUAL and CHINA PACINGRGDR5 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 OLD MUTUAL with a short position of CHINA PACINGRGDR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of OLD MUTUAL and CHINA PACINGRGDR5.
Diversification Opportunities for OLD MUTUAL and CHINA PACINGRGDR5
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OLD and CHINA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding OLD MUTUAL LTD and CHINA PACINGRGDR5 YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA PACINGRGDR5 YC1 and OLD MUTUAL 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 OLD MUTUAL LTD are associated (or correlated) with CHINA PACINGRGDR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA PACINGRGDR5 YC1 has no effect on the direction of OLD MUTUAL i.e., OLD MUTUAL and CHINA PACINGRGDR5 go up and down completely randomly.
Pair Corralation between OLD MUTUAL and CHINA PACINGRGDR5
Assuming the 90 days horizon OLD MUTUAL LTD is expected to generate 0.9 times more return on investment than CHINA PACINGRGDR5. However, OLD MUTUAL LTD is 1.12 times less risky than CHINA PACINGRGDR5. It trades about -0.17 of its potential returns per unit of risk. CHINA PACINGRGDR5 YC1 is currently generating about -0.16 per unit of risk. If you would invest 64.00 in OLD MUTUAL LTD on October 25, 2024 and sell it today you would lose (4.00) from holding OLD MUTUAL LTD or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OLD MUTUAL LTD vs. CHINA PACINGRGDR5 YC1
Performance |
| Timeline |
| OLD MUTUAL LTD |
| CHINA PACINGRGDR5 YC1 |
OLD MUTUAL and CHINA PACINGRGDR5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OLD MUTUAL and CHINA PACINGRGDR5
The main advantage of trading using opposite OLD MUTUAL and CHINA PACINGRGDR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OLD MUTUAL position performs unexpectedly, CHINA PACINGRGDR5 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 PACINGRGDR5 will offset losses from the drop in CHINA PACINGRGDR5's long position.| OLD MUTUAL vs. Thai Beverage Public | OLD MUTUAL vs. TreeHouse Foods | OLD MUTUAL vs. PULSION Medical Systems | OLD MUTUAL vs. Medical Properties Trust |
| CHINA PACINGRGDR5 vs. Siemens Healthineers AG | CHINA PACINGRGDR5 vs. WESANA HEALTH HOLD | CHINA PACINGRGDR5 vs. Molina Healthcare | CHINA PACINGRGDR5 vs. SHIP HEALTHCARE HLDGINC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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