Correlation Between Peoples Insurance and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Peoples Insurance and ZhongAn Online 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 Peoples Insurance and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Peoples Insurance and ZhongAn Online P, you can compare the effects of market volatilities on Peoples Insurance and ZhongAn Online 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 Peoples Insurance with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and ZhongAn Online.
Diversification Opportunities for Peoples Insurance and ZhongAn Online
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peoples and ZhongAn is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Peoples Insurance and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and Peoples Insurance 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 The Peoples Insurance are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and ZhongAn Online go up and down completely randomly.
Pair Corralation between Peoples Insurance and ZhongAn Online
Assuming the 90 days horizon The Peoples Insurance is expected to generate 1.59 times more return on investment than ZhongAn Online. However, Peoples Insurance is 1.59 times more volatile than ZhongAn Online P. It trades about 0.17 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.1 per unit of risk. If you would invest 35.00 in The Peoples Insurance on September 13, 2024 and sell it today you would earn a total of 5.00 from holding The Peoples Insurance or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Peoples Insurance vs. ZhongAn Online P
Performance |
| Timeline |
| Peoples Insurance |
| ZhongAn Online P |
Peoples Insurance and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and ZhongAn Online
The main advantage of trading using opposite Peoples Insurance and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Peoples Insurance vs. W R Berkley | Peoples Insurance vs. The Hanover Insurance | Peoples Insurance vs. ZhongAn Online P |
| ZhongAn Online vs. The Peoples Insurance | ZhongAn Online vs. W R Berkley | ZhongAn Online vs. The Hanover Insurance |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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