Correlation Between Postal Savings and OVERSEA CHINUNSPADR2
Can any of the company-specific risk be diversified away by investing in both Postal Savings and OVERSEA CHINUNSPADR2 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 Postal Savings and OVERSEA CHINUNSPADR2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and OVERSEA CHINUNSPADR2, you can compare the effects of market volatilities on Postal Savings and OVERSEA CHINUNSPADR2 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 Postal Savings with a short position of OVERSEA CHINUNSPADR2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and OVERSEA CHINUNSPADR2.
Diversification Opportunities for Postal Savings and OVERSEA CHINUNSPADR2
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Postal and OVERSEA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and OVERSEA CHINUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVERSEA CHINUNSPADR2 and Postal Savings 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 Postal Savings Bank are associated (or correlated) with OVERSEA CHINUNSPADR2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVERSEA CHINUNSPADR2 has no effect on the direction of Postal Savings i.e., Postal Savings and OVERSEA CHINUNSPADR2 go up and down completely randomly.
Pair Corralation between Postal Savings and OVERSEA CHINUNSPADR2
Assuming the 90 days horizon Postal Savings Bank is expected to generate 4.52 times more return on investment than OVERSEA CHINUNSPADR2. However, Postal Savings is 4.52 times more volatile than OVERSEA CHINUNSPADR2. It trades about 0.12 of its potential returns per unit of risk. OVERSEA CHINUNSPADR2 is currently generating about 0.17 per unit of risk. If you would invest 38.00 in Postal Savings Bank on October 31, 2024 and sell it today you would earn a total of 18.00 from holding Postal Savings Bank or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. OVERSEA CHINUNSPADR2
Performance |
| Timeline |
| Postal Savings Bank |
| OVERSEA CHINUNSPADR2 |
Postal Savings and OVERSEA CHINUNSPADR2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and OVERSEA CHINUNSPADR2
The main advantage of trading using opposite Postal Savings and OVERSEA CHINUNSPADR2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR2 will offset losses from the drop in OVERSEA CHINUNSPADR2's long position.| Postal Savings vs. Apollo Investment Corp | Postal Savings vs. Japan Asia Investment | Postal Savings vs. AGNC INVESTMENT | Postal Savings vs. Gladstone Investment |
| OVERSEA CHINUNSPADR2 vs. POSBO UNSPADRS20YC1 | OVERSEA CHINUNSPADR2 vs. Postal Savings Bank | OVERSEA CHINUNSPADR2 vs. Truist Financial | OVERSEA CHINUNSPADR2 vs. Oversea Chinese Banking |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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