Correlation Between China Taiping and CHINA PACINGRGDR5
Can any of the company-specific risk be diversified away by investing in both China Taiping and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 YC1, you can compare the effects of market volatilities on China Taiping and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Taiping and CHINA PACINGRGDR5.
Diversification Opportunities for China Taiping and CHINA PACINGRGDR5
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and CHINA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Taiping Insurance and CHINA PACINGRGDR5 YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA PACINGRGDR5 YC1 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 CHINA PACINGRGDR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA PACINGRGDR5 YC1 has no effect on the direction of China Taiping i.e., China Taiping and CHINA PACINGRGDR5 go up and down completely randomly.
Pair Corralation between China Taiping and CHINA PACINGRGDR5
Assuming the 90 days trading horizon China Taiping Insurance is expected to generate 1.18 times more return on investment than CHINA PACINGRGDR5. However, China Taiping is 1.18 times more volatile than CHINA PACINGRGDR5 YC1. It trades about -0.09 of its potential returns per unit of risk. CHINA PACINGRGDR5 YC1 is currently generating about -0.16 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Taiping Insurance vs. CHINA PACINGRGDR5 YC1
Performance |
| Timeline |
| China Taiping Insurance |
| CHINA PACINGRGDR5 YC1 |
China Taiping and CHINA PACINGRGDR5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Taiping and CHINA PACINGRGDR5
The main advantage of trading using opposite China Taiping and CHINA PACINGRGDR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Taiping position performs unexpectedly, CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 will offset losses from the drop in CHINA PACINGRGDR5'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 |
| CHINA PACINGRGDR5 vs. Siemens Healthineers AG | CHINA PACINGRGDR5 vs. WESANA HEALTH HOLD | CHINA PACINGRGDR5 vs. Molina Healthcare | CHINA PACINGRGDR5 vs. SHIP HEALTHCARE HLDGINC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |