Correlation Between CNFinance Holdings and Security National
Can any of the company-specific risk be diversified away by investing in both CNFinance Holdings and Security National 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 CNFinance Holdings and Security National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNFinance Holdings and Security National Financial, you can compare the effects of market volatilities on CNFinance Holdings and Security National 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 CNFinance Holdings with a short position of Security National. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and Security National.
Diversification Opportunities for CNFinance Holdings and Security National
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between CNFinance and Security is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National and CNFinance Holdings 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 CNFinance Holdings are associated (or correlated) with Security National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security National has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and Security National go up and down completely randomly.
Pair Corralation between CNFinance Holdings and Security National
Considering the 90-day investment horizon CNFinance Holdings is expected to under-perform the Security National. In addition to that, CNFinance Holdings is 2.36 times more volatile than Security National Financial. It trades about -0.03 of its total potential returns per unit of risk. Security National Financial is currently generating about 0.08 per unit of volatility. If you would invest 713.00 in Security National Financial on August 27, 2024 and sell it today you would earn a total of 567.00 from holding Security National Financial or generate 79.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNFinance Holdings vs. Security National Financial
Performance |
| Timeline |
| CNFinance Holdings |
| Security National |
CNFinance Holdings and Security National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNFinance Holdings and Security National
The main advantage of trading using opposite CNFinance Holdings and Security National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNFinance Holdings position performs unexpectedly, Security National 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 Security National will offset losses from the drop in Security National's long position.| CNFinance Holdings vs. Guild Holdings Co | CNFinance Holdings vs. PennyMac Finl Svcs | CNFinance Holdings vs. Security National Financial | CNFinance Holdings vs. Encore Capital Group |
| Security National vs. Guild Holdings Co | Security National vs. Encore Capital Group | Security National vs. PennyMac Finl Svcs | Security National vs. CNFinance Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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