Correlation Between 516220 and Postal Savings
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By analyzing existing cross correlation between 516220 and Postal Savings Bank, you can compare the effects of market volatilities on 516220 and Postal Savings 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 516220 with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 516220 and Postal Savings.
Diversification Opportunities for 516220 and Postal Savings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 516220 and Postal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding 516220 and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and 516220 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 516220 are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of 516220 i.e., 516220 and Postal Savings go up and down completely randomly.
Pair Corralation between 516220 and Postal Savings
Assuming the 90 days trading horizon 516220 is expected to generate 1.38 times more return on investment than Postal Savings. However, 516220 is 1.38 times more volatile than Postal Savings Bank. It trades about 0.05 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.04 per unit of risk. If you would invest 65.00 in 516220 on September 2, 2024 and sell it today you would earn a total of 1.00 from holding 516220 or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
516220 vs. Postal Savings Bank
Performance |
| Timeline |
| 516220 |
| Postal Savings Bank |
516220 and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 516220 and Postal Savings
The main advantage of trading using opposite 516220 and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 516220 position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.The idea behind 516220 and Postal Savings Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Postal Savings vs. Xiangyang Automobile Bearing | Postal Savings vs. Guangdong Shenglu Telecommunication | Postal Savings vs. SUNSEA Telecommunications Co | Postal Savings vs. Tongyu Communication |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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