Correlation Between TFS FINANCIAL and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL 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 TFS FINANCIAL and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and ZhongAn Online P, you can compare the effects of market volatilities on TFS FINANCIAL 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 TFS FINANCIAL with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and ZhongAn Online.
Diversification Opportunities for TFS FINANCIAL and ZhongAn Online
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between TFS and ZhongAn is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL i.e., TFS FINANCIAL and ZhongAn Online go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and ZhongAn Online
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 0.52 times more return on investment than ZhongAn Online. However, TFS FINANCIAL is 1.92 times less risky than ZhongAn Online. It trades about -0.15 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 1,322 in TFS FINANCIAL on September 15, 2024 and sell it today you would lose (62.00) from holding TFS FINANCIAL or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFS FINANCIAL vs. ZhongAn Online P
Performance |
| Timeline |
| TFS FINANCIAL |
| ZhongAn Online P |
TFS FINANCIAL and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and ZhongAn Online
The main advantage of trading using opposite TFS FINANCIAL and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL 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.| TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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