Correlation Between Posiflex Technology and Central Reinsurance
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and Central Reinsurance 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 Posiflex Technology and Central Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Central Reinsurance Corp, you can compare the effects of market volatilities on Posiflex Technology and Central Reinsurance 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 Posiflex Technology with a short position of Central Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Central Reinsurance.
Diversification Opportunities for Posiflex Technology and Central Reinsurance
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Posiflex and Central is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Central Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Reinsurance Corp and Posiflex Technology 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 Posiflex Technology are associated (or correlated) with Central Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Reinsurance Corp has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and Central Reinsurance go up and down completely randomly.
Pair Corralation between Posiflex Technology and Central Reinsurance
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 3.74 times more return on investment than Central Reinsurance. However, Posiflex Technology is 3.74 times more volatile than Central Reinsurance Corp. It trades about 0.26 of its potential returns per unit of risk. Central Reinsurance Corp is currently generating about -0.1 per unit of risk. If you would invest 21,600 in Posiflex Technology on October 25, 2024 and sell it today you would earn a total of 12,050 from holding Posiflex Technology or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Central Reinsurance Corp
Performance |
| Timeline |
| Posiflex Technology |
| Central Reinsurance Corp |
Posiflex Technology and Central Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Central Reinsurance
The main advantage of trading using opposite Posiflex Technology and Central Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology position performs unexpectedly, Central Reinsurance 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 Central Reinsurance will offset losses from the drop in Central Reinsurance's long position.| Posiflex Technology vs. Flytech Technology Co | Posiflex Technology vs. Advantech Co | Posiflex Technology vs. Ennoconn Corp | Posiflex Technology vs. Chenbro Micom Co |
| Central Reinsurance vs. Taiwan Semiconductor Manufacturing | Central Reinsurance vs. Evergreen Marine Corp | Central Reinsurance vs. Yang Ming Marine | Central Reinsurance vs. Wan Hai Lines |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Transaction History View history of all your transactions and understand their impact on performance |