Correlation Between Peoples Insurance and Anhui Huaren
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By analyzing existing cross correlation between Peoples Insurance of and Anhui Huaren Health, you can compare the effects of market volatilities on Peoples Insurance and Anhui Huaren 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 Anhui Huaren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Anhui Huaren.
Diversification Opportunities for Peoples Insurance and Anhui Huaren
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peoples and Anhui is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and Anhui Huaren Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaren Health 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 Anhui Huaren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaren Health has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Anhui Huaren go up and down completely randomly.
Pair Corralation between Peoples Insurance and Anhui Huaren
Assuming the 90 days trading horizon Peoples Insurance of is expected to generate 0.58 times more return on investment than Anhui Huaren. However, Peoples Insurance of is 1.71 times less risky than Anhui Huaren. It trades about 0.05 of its potential returns per unit of risk. Anhui Huaren Health is currently generating about -0.04 per unit of risk. If you would invest 496.00 in Peoples Insurance of on November 7, 2024 and sell it today you would earn a total of 220.00 from holding Peoples Insurance of or generate 44.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.11% |
| Values | Daily Returns |
Peoples Insurance of vs. Anhui Huaren Health
Performance |
| Timeline |
| Peoples Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Anhui Huaren Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Peoples Insurance and Anhui Huaren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Anhui Huaren
The main advantage of trading using opposite Peoples Insurance and Anhui Huaren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Anhui Huaren 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 Anhui Huaren will offset losses from the drop in Anhui Huaren's long position.The idea behind Peoples Insurance of and Anhui Huaren Health 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.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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