Correlation Between Prosperity Bancshares and China Lending
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares and China Lending 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 Prosperity Bancshares and China Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and China Lending Corp, you can compare the effects of market volatilities on Prosperity Bancshares and China Lending 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 Prosperity Bancshares with a short position of China Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and China Lending.
Diversification Opportunities for Prosperity Bancshares and China Lending
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosperity and China is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares and China Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Lending Corp and Prosperity Bancshares 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 Prosperity Bancshares are associated (or correlated) with China Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Lending Corp has no effect on the direction of Prosperity Bancshares i.e., Prosperity Bancshares and China Lending go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and China Lending
If you would invest 7,410 in Prosperity Bancshares on August 28, 2024 and sell it today you would earn a total of 1,097 from holding Prosperity Bancshares or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Prosperity Bancshares vs. China Lending Corp
Performance |
| Timeline |
| Prosperity Bancshares |
| China Lending Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Prosperity Bancshares and China Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and China Lending
The main advantage of trading using opposite Prosperity Bancshares and China Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares position performs unexpectedly, China Lending 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 Lending will offset losses from the drop in China Lending's long position.| Prosperity Bancshares vs. Fifth Third Bancorp | Prosperity Bancshares vs. Zions Bancorporation | Prosperity Bancshares vs. Huntington Bancshares Incorporated | Prosperity Bancshares vs. Comerica |
| China Lending vs. Qudian Inc | China Lending vs. X Financial Class | China Lending vs. FinVolution Group | China Lending vs. Senmiao Technology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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