Correlation Between Chengdu PUTIAN and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and ZURICH 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 Chengdu PUTIAN and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chengdu PUTIAN Telecommunications and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on Chengdu PUTIAN and ZURICH 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 Chengdu PUTIAN with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and ZURICH INSURANCE.
Diversification Opportunities for Chengdu PUTIAN and ZURICH INSURANCE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chengdu and ZURICH is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications are associated (or correlated) with ZURICH INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZURICH INSURANCE has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and ZURICH INSURANCE
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 6.58 times more return on investment than ZURICH INSURANCE. However, Chengdu PUTIAN is 6.58 times more volatile than ZURICH INSURANCE GROUP. It trades about 0.02 of its potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about 0.08 per unit of risk. If you would invest 11.00 in Chengdu PUTIAN Telecommunications on November 5, 2024 and sell it today you would lose (3.15) from holding Chengdu PUTIAN Telecommunications or give up 28.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| ZURICH INSURANCE |
Chengdu PUTIAN and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and ZURICH INSURANCE
The main advantage of trading using opposite Chengdu PUTIAN and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, ZURICH 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 ZURICH INSURANCE will offset losses from the drop in ZURICH INSURANCE's long position.| Chengdu PUTIAN vs. UNIVERSAL DISPLAY | Chengdu PUTIAN vs. CSSC Offshore Marine | Chengdu PUTIAN vs. ANTA SPORTS PRODUCT | Chengdu PUTIAN vs. Columbia Sportswear |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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