Correlation Between Safety Insurance and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and Chuangs China 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 Safety Insurance and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and Chuangs China Investments, you can compare the effects of market volatilities on Safety Insurance and Chuangs China 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 Safety Insurance with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Chuangs China.
Diversification Opportunities for Safety Insurance and Chuangs China
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Safety and Chuangs is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and Safety 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 Safety Insurance Group are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Safety Insurance i.e., Safety Insurance and Chuangs China go up and down completely randomly.
Pair Corralation between Safety Insurance and Chuangs China
Assuming the 90 days horizon Safety Insurance Group is expected to generate 2.62 times more return on investment than Chuangs China. However, Safety Insurance is 2.62 times more volatile than Chuangs China Investments. It trades about 0.08 of its potential returns per unit of risk. Chuangs China Investments is currently generating about 0.0 per unit of risk. If you would invest 6,871 in Safety Insurance Group on September 2, 2024 and sell it today you would earn a total of 1,129 from holding Safety Insurance Group or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. Chuangs China Investments
Performance |
| Timeline |
| Safety Insurance |
| Chuangs China Investments |
Safety Insurance and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Chuangs China
The main advantage of trading using opposite Safety Insurance and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| Safety Insurance vs. Sabra Health Care | Safety Insurance vs. Internet Thailand PCL | Safety Insurance vs. YOOMA WELLNESS INC | Safety Insurance vs. FEMALE HEALTH |
| Chuangs China vs. Corporate Office Properties | Chuangs China vs. 24SEVENOFFICE GROUP AB | Chuangs China vs. MTI WIRELESS EDGE | Chuangs China vs. Tower One Wireless |
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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