Correlation Between Peoples Insurance and Fangda Special
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By analyzing existing cross correlation between Peoples Insurance of and Fangda Special Steel, you can compare the effects of market volatilities on Peoples Insurance and Fangda Special 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 Fangda Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Fangda Special.
Diversification Opportunities for Peoples Insurance and Fangda Special
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Peoples and Fangda is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and Fangda Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangda Special Steel 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 Fangda Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangda Special Steel has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Fangda Special go up and down completely randomly.
Pair Corralation between Peoples Insurance and Fangda Special
Assuming the 90 days trading horizon Peoples Insurance of is expected to generate 1.13 times more return on investment than Fangda Special. However, Peoples Insurance is 1.13 times more volatile than Fangda Special Steel. It trades about 0.05 of its potential returns per unit of risk. Fangda Special Steel is currently generating about -0.04 per unit of risk. If you would invest 506.00 in Peoples Insurance of on October 29, 2024 and sell it today you would earn a total of 210.00 from holding Peoples Insurance of or generate 41.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Insurance of vs. Fangda Special Steel
Performance |
| Timeline |
| Peoples Insurance |
| Fangda Special Steel |
Peoples Insurance and Fangda Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Fangda Special
The main advantage of trading using opposite Peoples Insurance and Fangda Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Fangda Special 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 Fangda Special will offset losses from the drop in Fangda Special's long position.| Peoples Insurance vs. BeiGene | Peoples Insurance vs. Kweichow Moutai Co | Peoples Insurance vs. Beijing Roborock Technology | Peoples Insurance vs. G bits Network Technology |
| Fangda Special vs. Zijin Mining Group | Fangda Special vs. Wanhua Chemical Group | Fangda Special vs. Baoshan Iron Steel | Fangda Special vs. Shandong Gold Mining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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