Correlation Between Peoples Insurance and China Construction
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By analyzing existing cross correlation between Peoples Insurance of and China Construction Bank, you can compare the effects of market volatilities on Peoples Insurance and China Construction 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 China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and China Construction.
Diversification Opportunities for Peoples Insurance and China Construction
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Peoples and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank 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 China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and China Construction go up and down completely randomly.
Pair Corralation between Peoples Insurance and China Construction
Assuming the 90 days trading horizon Peoples Insurance is expected to generate 1.4 times less return on investment than China Construction. In addition to that, Peoples Insurance is 1.34 times more volatile than China Construction Bank. It trades about 0.03 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.05 per unit of volatility. If you would invest 656.00 in China Construction Bank on August 31, 2024 and sell it today you would earn a total of 148.00 from holding China Construction Bank or generate 22.56% 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. China Construction Bank
Performance |
| Timeline |
| Peoples Insurance |
| China Construction Bank |
Peoples Insurance and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and China Construction
The main advantage of trading using opposite Peoples Insurance and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction's long position.| Peoples Insurance vs. Emdoor Information Co | Peoples Insurance vs. Focus Media Information | Peoples Insurance vs. Dawning Information Industry | Peoples Insurance vs. Guilin Seamild Foods |
| China Construction vs. Guangdong Jinming Machinery | China Construction vs. Postal Savings Bank | China Construction vs. Peoples Insurance of | China Construction vs. Allied Machinery 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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