Correlation Between China Reinsurance and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both China Reinsurance and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Reinsurance and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on China Reinsurance and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Reinsurance and KINGBOARD CHEMICAL.
Diversification Opportunities for China Reinsurance and KINGBOARD CHEMICAL
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and KINGBOARD is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding China Reinsurance and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of China Reinsurance i.e., China Reinsurance and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between China Reinsurance and KINGBOARD CHEMICAL
Assuming the 90 days horizon China Reinsurance is expected to generate 4.08 times more return on investment than KINGBOARD CHEMICAL. However, China Reinsurance is 4.08 times more volatile than KINGBOARD CHEMICAL. It trades about 0.09 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.07 per unit of risk. If you would invest 3.60 in China Reinsurance on October 16, 2024 and sell it today you would earn a total of 6.40 from holding China Reinsurance or generate 177.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
China Reinsurance vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| China Reinsurance |
| KINGBOARD CHEMICAL |
China Reinsurance and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Reinsurance and KINGBOARD CHEMICAL
The main advantage of trading using opposite China Reinsurance and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Reinsurance position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| China Reinsurance vs. Ubisoft Entertainment SA | China Reinsurance vs. Tencent Music Entertainment | China Reinsurance vs. Townsquare Media | China Reinsurance vs. alstria office REIT AG |
| KINGBOARD CHEMICAL vs. IMPERIAL TOBACCO | KINGBOARD CHEMICAL vs. CAIRN HOMES EO | KINGBOARD CHEMICAL vs. CarsalesCom | KINGBOARD CHEMICAL vs. OFFICE DEPOT |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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