Correlation Between China Reinsurance and CTT Correios
Can any of the company-specific risk be diversified away by investing in both China Reinsurance and CTT Correios 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 Reinsurance and CTT Correios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Reinsurance and CTT Correios, you can compare the effects of market volatilities on China Reinsurance and CTT Correios 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 Reinsurance with a short position of CTT Correios. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Reinsurance and CTT Correios.
Diversification Opportunities for China Reinsurance and CTT Correios
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and CTT is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Reinsurance and CTT Correios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Correios and China Reinsurance 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 Reinsurance are associated (or correlated) with CTT Correios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Correios has no effect on the direction of China Reinsurance i.e., China Reinsurance and CTT Correios go up and down completely randomly.
Pair Corralation between China Reinsurance and CTT Correios
Assuming the 90 days horizon China Reinsurance is expected to generate 2.63 times less return on investment than CTT Correios. In addition to that, China Reinsurance is 2.38 times more volatile than CTT Correios. It trades about 0.05 of its total potential returns per unit of risk. CTT Correios is currently generating about 0.32 per unit of volatility. If you would invest 443.00 in CTT Correios on October 30, 2024 and sell it today you would earn a total of 142.00 from holding CTT Correios or generate 32.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Reinsurance vs. CTT Correios
Performance |
| Timeline |
| China Reinsurance |
| CTT Correios |
China Reinsurance and CTT Correios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Reinsurance and CTT Correios
The main advantage of trading using opposite China Reinsurance and CTT Correios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Reinsurance position performs unexpectedly, CTT Correios 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 CTT Correios will offset losses from the drop in CTT Correios' long position.| China Reinsurance vs. Swiss Re AG | China Reinsurance vs. Reinsurance Group of | China Reinsurance vs. Superior Plus Corp | China Reinsurance vs. Origin Agritech |
| CTT Correios vs. Nok Airlines PCL | CTT Correios vs. Gol Intelligent Airlines | CTT Correios vs. AEGEAN AIRLINES | CTT Correios vs. SINGAPORE AIRLINES |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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