Correlation Between ZhongAn Online and W R

Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and W R 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 ZhongAn Online and W R into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZhongAn Online P and W R Berkley, you can compare the effects of market volatilities on ZhongAn Online and W R 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 ZhongAn Online with a short position of W R. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and W R.

Diversification Opportunities for ZhongAn Online and W R

-0.31

Correlation Coefficient

ZhongAn Online  W R

Very good diversification

The 3 months correlation between ZhongAn and WR1 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and W R go up and down completely randomly.

Pair Corralation between ZhongAn Online and W R

Assuming the 90 days horizon ZhongAn Online P is expected to under-perform the W R. In addition to that, ZhongAn Online is 2.52 times more volatile than W R Berkley. It trades about -0.04 of its total potential returns per unit of risk. W R Berkley is currently generating about 0.13 per unit of volatility. If you would invest  5,015  in W R Berkley on September 30, 2024 and sell it today you would earn a total of  677.00  from holding W R Berkley or generate 13.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ZhongAn Online P  vs.  W R Berkley

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

W R Berkley

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in W R Berkley are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, W R reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZhongAn Online and W R

The main advantage of trading using opposite ZhongAn Online and W R positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, W R 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 W R will offset losses from the drop in W R's long position.

The idea behind ZhongAn Online P and W R Berkley pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.