Correlation Between Peoples Insurance and ZheJiang BangJie
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By analyzing existing cross correlation between Peoples Insurance of and ZheJiang BangJie Digital, you can compare the effects of market volatilities on Peoples Insurance and ZheJiang BangJie 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 Peoples Insurance with a short position of ZheJiang BangJie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and ZheJiang BangJie.
Diversification Opportunities for Peoples Insurance and ZheJiang BangJie
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Peoples and ZheJiang is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and ZheJiang BangJie Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZheJiang BangJie Digital and Peoples Insurance 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 Peoples Insurance of are associated (or correlated) with ZheJiang BangJie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZheJiang BangJie Digital has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and ZheJiang BangJie go up and down completely randomly.
Pair Corralation between Peoples Insurance and ZheJiang BangJie
Assuming the 90 days trading horizon Peoples Insurance of is expected to generate 0.53 times more return on investment than ZheJiang BangJie. However, Peoples Insurance of is 1.87 times less risky than ZheJiang BangJie. It trades about 0.11 of its potential returns per unit of risk. ZheJiang BangJie Digital is currently generating about -0.03 per unit of risk. If you would invest 479.00 in Peoples Insurance of on September 12, 2024 and sell it today you would earn a total of 266.00 from holding Peoples Insurance of or generate 55.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Insurance of vs. ZheJiang BangJie Digital
Performance |
| Timeline |
| Peoples Insurance |
| ZheJiang BangJie Digital |
Peoples Insurance and ZheJiang BangJie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and ZheJiang BangJie
The main advantage of trading using opposite Peoples Insurance and ZheJiang BangJie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, ZheJiang BangJie 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 ZheJiang BangJie will offset losses from the drop in ZheJiang BangJie's long position.The idea behind Peoples Insurance of and ZheJiang BangJie Digital 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.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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