Correlation Between Peoples Insurance and Dazhong Transportation
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By analyzing existing cross correlation between Peoples Insurance of and Dazhong Transportation Group, you can compare the effects of market volatilities on Peoples Insurance and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Dazhong Transportation.
Diversification Opportunities for Peoples Insurance and Dazhong Transportation
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Peoples and Dazhong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Peoples Insurance and Dazhong Transportation
Assuming the 90 days trading horizon Peoples Insurance is expected to generate 1.15 times less return on investment than Dazhong Transportation. But when comparing it to its historical volatility, Peoples Insurance of is 1.73 times less risky than Dazhong Transportation. It trades about 0.09 of its potential returns per unit of risk. Dazhong Transportation Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Dazhong Transportation Group on August 25, 2024 and sell it today you would earn a total of 7.00 from holding Dazhong Transportation Group or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Insurance of vs. Dazhong Transportation Group
Performance |
| Timeline |
| Peoples Insurance |
| Dazhong Transportation |
Peoples Insurance and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Dazhong Transportation
The main advantage of trading using opposite Peoples Insurance and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Peoples Insurance vs. PetroChina Co Ltd | Peoples Insurance vs. China Mobile Limited | Peoples Insurance vs. CNOOC Limited | Peoples Insurance vs. Ping An Insurance |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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