Correlation Between Selectquote and Fanhua
Can any of the company-specific risk be diversified away by investing in both Selectquote and Fanhua 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 Selectquote and Fanhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selectquote and Fanhua Inc, you can compare the effects of market volatilities on Selectquote and Fanhua 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 Selectquote with a short position of Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selectquote and Fanhua.
Diversification Opportunities for Selectquote and Fanhua
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Selectquote and Fanhua is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Selectquote and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc and Selectquote 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 Selectquote are associated (or correlated) with Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of Selectquote i.e., Selectquote and Fanhua go up and down completely randomly.
Pair Corralation between Selectquote and Fanhua
If you would invest 203.00 in Selectquote on August 28, 2024 and sell it today you would earn a total of 95.00 from holding Selectquote or generate 46.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Selectquote vs. Fanhua Inc
Performance |
| Timeline |
| Selectquote |
| Fanhua Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Selectquote and Fanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selectquote and Fanhua
The main advantage of trading using opposite Selectquote and Fanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selectquote position performs unexpectedly, Fanhua 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 Fanhua will offset losses from the drop in Fanhua's long position.| Selectquote vs. CorVel Corp | Selectquote vs. eHealth | Selectquote vs. Aquagold International | Selectquote vs. Morningstar Unconstrained Allocation |
| Fanhua vs. Erie Indemnity | Fanhua vs. Crawford Company | Fanhua vs. Crawford Company | Fanhua vs. CorVel Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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