Correlation Between Cars and PICC Property
Can any of the company-specific risk be diversified away by investing in both Cars and PICC Property 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 Cars and PICC Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and PICC Property and, you can compare the effects of market volatilities on Cars and PICC Property 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 Cars with a short position of PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and PICC Property.
Diversification Opportunities for Cars and PICC Property
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cars and PICC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property and Cars 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 Cars Inc are associated (or correlated) with PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of Cars i.e., Cars and PICC Property go up and down completely randomly.
Pair Corralation between Cars and PICC Property
Assuming the 90 days horizon Cars is expected to generate 4.66 times less return on investment than PICC Property. But when comparing it to its historical volatility, Cars Inc is 2.07 times less risky than PICC Property. It trades about 0.04 of its potential returns per unit of risk. PICC Property and is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 19.00 in PICC Property and on September 12, 2024 and sell it today you would earn a total of 128.00 from holding PICC Property and or generate 673.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. PICC Property and
Performance |
| Timeline |
| Cars Inc |
| PICC Property |
Cars and PICC Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and PICC Property
The main advantage of trading using opposite Cars and PICC Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, PICC Property 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 PICC Property will offset losses from the drop in PICC Property's long position.| Cars vs. Superior Plus Corp | Cars vs. SIVERS SEMICONDUCTORS AB | Cars vs. Norsk Hydro ASA | Cars vs. Reliance Steel Aluminum |
| PICC Property vs. QBE Insurance Group | PICC Property vs. Insurance Australia Group | PICC Property vs. Superior Plus Corp | PICC Property vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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