Correlation Between Ma Kuang and Central Reinsurance
Can any of the company-specific risk be diversified away by investing in both Ma Kuang and Central Reinsurance 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 Ma Kuang and Central Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ma Kuang Healthcare and Central Reinsurance Corp, you can compare the effects of market volatilities on Ma Kuang and Central Reinsurance 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 Ma Kuang with a short position of Central Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ma Kuang and Central Reinsurance.
Diversification Opportunities for Ma Kuang and Central Reinsurance
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between 4139 and Central is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ma Kuang Healthcare and Central Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Reinsurance Corp and Ma Kuang 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 Ma Kuang Healthcare are associated (or correlated) with Central Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Reinsurance Corp has no effect on the direction of Ma Kuang i.e., Ma Kuang and Central Reinsurance go up and down completely randomly.
Pair Corralation between Ma Kuang and Central Reinsurance
Assuming the 90 days trading horizon Ma Kuang Healthcare is expected to under-perform the Central Reinsurance. In addition to that, Ma Kuang is 1.57 times more volatile than Central Reinsurance Corp. It trades about -0.03 of its total potential returns per unit of risk. Central Reinsurance Corp is currently generating about 0.06 per unit of volatility. If you would invest 1,895 in Central Reinsurance Corp on August 30, 2024 and sell it today you would earn a total of 695.00 from holding Central Reinsurance Corp or generate 36.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ma Kuang Healthcare vs. Central Reinsurance Corp
Performance |
| Timeline |
| Ma Kuang Healthcare |
| Central Reinsurance Corp |
Ma Kuang and Central Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ma Kuang and Central Reinsurance
The main advantage of trading using opposite Ma Kuang and Central Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ma Kuang position performs unexpectedly, Central Reinsurance 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 Central Reinsurance will offset losses from the drop in Central Reinsurance's long position.| Ma Kuang vs. Syscom Computer Engineering | Ma Kuang vs. RiTdisplay Corp | Ma Kuang vs. Far EasTone Telecommunications | Ma Kuang vs. Mitake Information |
| Central Reinsurance vs. Hi Lai Foods Co | Central Reinsurance vs. Loop Telecommunication International | Central Reinsurance vs. China Mobile | Central Reinsurance vs. Hunya Foods 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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