Correlation Between China Taiping and OLD MUTUAL
Can any of the company-specific risk be diversified away by investing in both China Taiping and OLD MUTUAL 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 Taiping and OLD MUTUAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Taiping Insurance and OLD MUTUAL LTD, you can compare the effects of market volatilities on China Taiping and OLD MUTUAL 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 Taiping with a short position of OLD MUTUAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Taiping and OLD MUTUAL.
Diversification Opportunities for China Taiping and OLD MUTUAL
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and OLD is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Taiping Insurance and OLD MUTUAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLD MUTUAL LTD and China Taiping 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 Taiping Insurance are associated (or correlated) with OLD MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLD MUTUAL LTD has no effect on the direction of China Taiping i.e., China Taiping and OLD MUTUAL go up and down completely randomly.
Pair Corralation between China Taiping and OLD MUTUAL
Assuming the 90 days trading horizon China Taiping Insurance is expected to generate 1.31 times more return on investment than OLD MUTUAL. However, China Taiping is 1.31 times more volatile than OLD MUTUAL LTD. It trades about -0.09 of its potential returns per unit of risk. OLD MUTUAL LTD is currently generating about -0.17 per unit of risk. If you would invest 142.00 in China Taiping Insurance on October 25, 2024 and sell it today you would lose (7.00) from holding China Taiping Insurance or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Taiping Insurance vs. OLD MUTUAL LTD
Performance |
| Timeline |
| China Taiping Insurance |
| OLD MUTUAL LTD |
China Taiping and OLD MUTUAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Taiping and OLD MUTUAL
The main advantage of trading using opposite China Taiping and OLD MUTUAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Taiping position performs unexpectedly, OLD MUTUAL 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 OLD MUTUAL will offset losses from the drop in OLD MUTUAL's long position.| China Taiping vs. TEXAS ROADHOUSE | China Taiping vs. Goosehead Insurance | China Taiping vs. G III Apparel Group | China Taiping vs. Transport International Holdings |
| OLD MUTUAL vs. Thai Beverage Public | OLD MUTUAL vs. TreeHouse Foods | OLD MUTUAL vs. PULSION Medical Systems | OLD MUTUAL vs. Medical Properties Trust |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |