Correlation Between WT OFFSHORE and China Pacific
Can any of the company-specific risk be diversified away by investing in both WT OFFSHORE and China Pacific 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 WT OFFSHORE and China Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT OFFSHORE and China Pacific Insurance, you can compare the effects of market volatilities on WT OFFSHORE and China Pacific 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 WT OFFSHORE with a short position of China Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT OFFSHORE and China Pacific.
Diversification Opportunities for WT OFFSHORE and China Pacific
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UWV and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE and China Pacific Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Pacific Insurance and WT OFFSHORE 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 WT OFFSHORE are associated (or correlated) with China Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Pacific Insurance has no effect on the direction of WT OFFSHORE i.e., WT OFFSHORE and China Pacific go up and down completely randomly.
Pair Corralation between WT OFFSHORE and China Pacific
Assuming the 90 days trading horizon WT OFFSHORE is expected to under-perform the China Pacific. But the stock apears to be less risky and, when comparing its historical volatility, WT OFFSHORE is 1.91 times less risky than China Pacific. The stock trades about -0.05 of its potential returns per unit of risk. The China Pacific Insurance is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 88.00 in China Pacific Insurance on September 14, 2024 and sell it today you would earn a total of 216.00 from holding China Pacific Insurance or generate 245.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT OFFSHORE vs. China Pacific Insurance
Performance |
| Timeline |
| WT OFFSHORE |
| China Pacific Insurance |
WT OFFSHORE and China Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT OFFSHORE and China Pacific
The main advantage of trading using opposite WT OFFSHORE and China Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT OFFSHORE position performs unexpectedly, China Pacific 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 Pacific will offset losses from the drop in China Pacific's long position.| WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc |
| China Pacific vs. TSOGO SUN GAMING | China Pacific vs. SOFI TECHNOLOGIES | China Pacific vs. THORNEY TECHS LTD | China Pacific vs. Media and Games |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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