Correlation Between CHINA PACINGRGDR5 and China Taiping
Can any of the company-specific risk be diversified away by investing in both CHINA PACINGRGDR5 and China Taiping at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CHINA PACINGRGDR5 and China Taiping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA PACINGRGDR5 YC1 and China Taiping Insurance, you can compare the effects of market volatilities on CHINA PACINGRGDR5 and China Taiping 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 CHINA PACINGRGDR5 with a short position of China Taiping. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA PACINGRGDR5 and China Taiping.
Diversification Opportunities for CHINA PACINGRGDR5 and China Taiping
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHINA and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CHINA PACINGRGDR5 YC1 and China Taiping Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Taiping Insurance and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 YC1 are associated (or correlated) with China Taiping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Taiping Insurance has no effect on the direction of CHINA PACINGRGDR5 i.e., CHINA PACINGRGDR5 and China Taiping go up and down completely randomly.
Pair Corralation between CHINA PACINGRGDR5 and China Taiping
Assuming the 90 days trading horizon CHINA PACINGRGDR5 YC1 is expected to under-perform the China Taiping. But the stock apears to be less risky and, when comparing its historical volatility, CHINA PACINGRGDR5 YC1 is 1.18 times less risky than China Taiping. The stock trades about -0.16 of its potential returns per unit of risk. The China Taiping Insurance is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 142.00 in China Taiping Insurance on October 25, 2024 and sell it today you would lose (7.00) from holding China Taiping Insurance or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA PACINGRGDR5 YC1 vs. China Taiping Insurance
Performance |
| Timeline |
| CHINA PACINGRGDR5 YC1 |
| China Taiping Insurance |
CHINA PACINGRGDR5 and China Taiping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA PACINGRGDR5 and China Taiping
The main advantage of trading using opposite CHINA PACINGRGDR5 and China Taiping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA PACINGRGDR5 position performs unexpectedly, China Taiping 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 Taiping will offset losses from the drop in China Taiping's long position.| CHINA PACINGRGDR5 vs. Siemens Healthineers AG | CHINA PACINGRGDR5 vs. WESANA HEALTH HOLD | CHINA PACINGRGDR5 vs. Molina Healthcare | CHINA PACINGRGDR5 vs. SHIP HEALTHCARE HLDGINC |
| China Taiping vs. TEXAS ROADHOUSE | China Taiping vs. Goosehead Insurance | China Taiping vs. G III Apparel Group | China Taiping vs. Transport International Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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