Correlation Between LIFENET INSURANCE and CITIC
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and CITIC 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 LIFENET INSURANCE and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and CITIC Limited, you can compare the effects of market volatilities on LIFENET INSURANCE and CITIC 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 LIFENET INSURANCE with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and CITIC.
Diversification Opportunities for LIFENET INSURANCE and CITIC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LIFENET and CITIC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and LIFENET 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 LIFENET INSURANCE CO are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and CITIC go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and CITIC
Assuming the 90 days horizon LIFENET INSURANCE is expected to generate 4.82 times less return on investment than CITIC. But when comparing it to its historical volatility, LIFENET INSURANCE CO is 2.25 times less risky than CITIC. It trades about 0.05 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12.00 in CITIC Limited on September 12, 2024 and sell it today you would earn a total of 97.00 from holding CITIC Limited or generate 808.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. CITIC Limited
Performance |
| Timeline |
| LIFENET INSURANCE |
| CITIC Limited |
LIFENET INSURANCE and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and CITIC
The main advantage of trading using opposite LIFENET INSURANCE and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
| CITIC vs. THAI BEVERAGE | CITIC vs. Tsingtao Brewery | CITIC vs. LIFENET INSURANCE CO | CITIC vs. REVO INSURANCE SPA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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