Correlation Between VITEC SOFTWARE and Fanhua
Can any of the company-specific risk be diversified away by investing in both VITEC SOFTWARE and Fanhua 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 VITEC SOFTWARE and Fanhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VITEC SOFTWARE GROUP and Fanhua Inc, you can compare the effects of market volatilities on VITEC SOFTWARE and Fanhua 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 VITEC SOFTWARE with a short position of Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and Fanhua.
Diversification Opportunities for VITEC SOFTWARE and Fanhua
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between VITEC and Fanhua is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc and VITEC SOFTWARE 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 VITEC SOFTWARE GROUP are associated (or correlated) with Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of VITEC SOFTWARE i.e., VITEC SOFTWARE and Fanhua go up and down completely randomly.
Pair Corralation between VITEC SOFTWARE and Fanhua
Assuming the 90 days horizon VITEC SOFTWARE GROUP is expected to generate 0.41 times more return on investment than Fanhua. However, VITEC SOFTWARE GROUP is 2.45 times less risky than Fanhua. It trades about 0.03 of its potential returns per unit of risk. Fanhua Inc is currently generating about -0.08 per unit of risk. If you would invest 3,907 in VITEC SOFTWARE GROUP on October 26, 2024 and sell it today you would earn a total of 975.00 from holding VITEC SOFTWARE GROUP or generate 24.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VITEC SOFTWARE GROUP vs. Fanhua Inc
Performance |
| Timeline |
| VITEC SOFTWARE GROUP |
| Fanhua Inc |
VITEC SOFTWARE and Fanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITEC SOFTWARE and Fanhua
The main advantage of trading using opposite VITEC SOFTWARE and Fanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITEC SOFTWARE position performs unexpectedly, Fanhua 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 Fanhua will offset losses from the drop in Fanhua's long position.| VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc |
| Fanhua vs. Westinghouse Air Brake | Fanhua vs. RYANAIR HLDGS ADR | Fanhua vs. CHINA SOUTHN AIR H | Fanhua vs. EAGLE MATERIALS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |