Correlation Between CHINA EDUCATION and Tokio Marine
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and Tokio Marine 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 EDUCATION and Tokio Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Tokio Marine Holdings, you can compare the effects of market volatilities on CHINA EDUCATION and Tokio Marine 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 EDUCATION with a short position of Tokio Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Tokio Marine.
Diversification Opportunities for CHINA EDUCATION and Tokio Marine
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and Tokio is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Tokio Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokio Marine Holdings and CHINA EDUCATION 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 EDUCATION GROUP are associated (or correlated) with Tokio Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokio Marine Holdings has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and Tokio Marine go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Tokio Marine
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Tokio Marine. In addition to that, CHINA EDUCATION is 1.48 times more volatile than Tokio Marine Holdings. It trades about -0.05 of its total potential returns per unit of risk. Tokio Marine Holdings is currently generating about 0.05 per unit of volatility. If you would invest 1,980 in Tokio Marine Holdings on November 27, 2024 and sell it today you would earn a total of 1,211 from holding Tokio Marine Holdings or generate 61.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Tokio Marine Holdings
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Tokio Marine Holdings |
CHINA EDUCATION and Tokio Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Tokio Marine
The main advantage of trading using opposite CHINA EDUCATION and Tokio Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, Tokio Marine 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 Tokio Marine will offset losses from the drop in Tokio Marine's long position.| CHINA EDUCATION vs. COMPUTERSHARE | CHINA EDUCATION vs. Mitsui Chemicals | CHINA EDUCATION vs. TRI CHEMICAL LABORATINC | CHINA EDUCATION vs. Sumitomo Chemical |
| Tokio Marine vs. Yuexiu Transport Infrastructure | Tokio Marine vs. Kaufman Broad SA | Tokio Marine vs. DENTSPLY SIRONA | Tokio Marine vs. Mount Gibson Iron |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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