Correlation Between Aflac Incorporated and China Taiping
Can any of the company-specific risk be diversified away by investing in both Aflac Incorporated 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 Aflac Incorporated and China Taiping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aflac Incorporated and China Taiping Insurance, you can compare the effects of market volatilities on Aflac Incorporated 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 Aflac Incorporated with a short position of China Taiping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aflac Incorporated and China Taiping.
Diversification Opportunities for Aflac Incorporated and China Taiping
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aflac and China is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aflac Incorporated 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 Aflac Incorporated 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 Aflac Incorporated 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 Aflac Incorporated i.e., Aflac Incorporated and China Taiping go up and down completely randomly.
Pair Corralation between Aflac Incorporated and China Taiping
Assuming the 90 days horizon Aflac Incorporated is expected to generate 0.42 times more return on investment than China Taiping. However, Aflac Incorporated is 2.39 times less risky than China Taiping. It trades about 0.13 of its potential returns per unit of risk. China Taiping Insurance is currently generating about -0.09 per unit of risk. If you would invest 9,950 in Aflac Incorporated on October 25, 2024 and sell it today you would earn a total of 235.00 from holding Aflac Incorporated or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Aflac Incorporated vs. China Taiping Insurance
Performance |
| Timeline |
| Aflac Incorporated |
| China Taiping Insurance |
Aflac Incorporated and China Taiping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aflac Incorporated and China Taiping
The main advantage of trading using opposite Aflac Incorporated and China Taiping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aflac Incorporated 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.| Aflac Incorporated vs. The Yokohama Rubber | Aflac Incorporated vs. Tower One Wireless | Aflac Incorporated vs. GOODYEAR T RUBBER | Aflac Incorporated vs. VULCAN MATERIALS |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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