Correlation Between China Communications and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both China Communications and SBI Insurance 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 Communications and SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Communications Services and SBI Insurance Group, you can compare the effects of market volatilities on China Communications and SBI Insurance 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 Communications with a short position of SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Communications and SBI Insurance.
Diversification Opportunities for China Communications and SBI Insurance
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and SBI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Communications Services and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group and China Communications 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 Communications Services are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of China Communications i.e., China Communications and SBI Insurance go up and down completely randomly.
Pair Corralation between China Communications and SBI Insurance
Assuming the 90 days horizon China Communications is expected to generate 33.04 times less return on investment than SBI Insurance. In addition to that, China Communications is 1.03 times more volatile than SBI Insurance Group. It trades about 0.01 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.23 per unit of volatility. If you would invest 565.00 in SBI Insurance Group on September 1, 2024 and sell it today you would earn a total of 40.00 from holding SBI Insurance Group or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Communications Services vs. SBI Insurance Group
Performance |
| Timeline |
| China Communications |
| SBI Insurance Group |
China Communications and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Communications and SBI Insurance
The main advantage of trading using opposite China Communications and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Communications position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| China Communications vs. ATT Inc | China Communications vs. Deutsche Telekom AG | China Communications vs. Superior Plus Corp | China Communications vs. NMI Holdings |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |