Correlation Between Transport International and China Taiping
Can any of the company-specific risk be diversified away by investing in both Transport International and China Taiping 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 Transport International and China Taiping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and China Taiping Insurance, you can compare the effects of market volatilities on Transport International and China Taiping 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 Transport International with a short position of China Taiping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and China Taiping.
Diversification Opportunities for Transport International and China Taiping
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Transport and China is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and China Taiping Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Taiping Insurance and Transport International 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 Transport International Holdings are associated (or correlated) with China Taiping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Taiping Insurance has no effect on the direction of Transport International i.e., Transport International and China Taiping go up and down completely randomly.
Pair Corralation between Transport International and China Taiping
Assuming the 90 days horizon Transport International Holdings is expected to under-perform the China Taiping. In addition to that, Transport International is 1.28 times more volatile than China Taiping Insurance. It trades about 0.0 of its total potential returns per unit of risk. China Taiping Insurance is currently generating about 0.09 per unit of volatility. If you would invest 135.00 in China Taiping Insurance on November 4, 2024 and sell it today you would earn a total of 6.00 from holding China Taiping Insurance or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Transport International Holdin vs. China Taiping Insurance
Performance |
| Timeline |
| Transport International |
| China Taiping Insurance |
Transport International and China Taiping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and China Taiping
The main advantage of trading using opposite Transport International and China Taiping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, China Taiping 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 Taiping will offset losses from the drop in China Taiping's long position.| Transport International vs. ASURE SOFTWARE | Transport International vs. Magic Software Enterprises | Transport International vs. COVIVIO HOTELS INH | Transport International vs. Dalata Hotel Group |
| China Taiping vs. GEELY AUTOMOBILE | China Taiping vs. ETFS Coffee ETC | China Taiping vs. GRUPO CARSO A1 | China Taiping vs. BJs Restaurants |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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