Correlation Between Peoples Insurance and Jiangxi Selon

Can any of the company-specific risk be diversified away by investing in both Peoples Insurance and Jiangxi Selon 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 Peoples Insurance and Jiangxi Selon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Peoples Insurance of and Jiangxi Selon Industrial, you can compare the effects of market volatilities on Peoples Insurance and Jiangxi Selon 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 Peoples Insurance with a short position of Jiangxi Selon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Jiangxi Selon.

Diversification Opportunities for Peoples Insurance and Jiangxi Selon

0.23

Correlation Coefficient

Peoples Insurance  Jiangxi Selon

Modest diversification

The 3 months correlation between Peoples and Jiangxi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and Jiangxi Selon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Selon Industrial and Peoples 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 Peoples Insurance of are associated (or correlated) with Jiangxi Selon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Selon Industrial has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Jiangxi Selon go up and down completely randomly.

Pair Corralation between Peoples Insurance and Jiangxi Selon

Assuming the 90 days trading horizon Peoples Insurance of is expected to under-perform the Jiangxi Selon. But the stock apears to be less risky and, when comparing its historical volatility, Peoples Insurance of is 1.19 times less risky than Jiangxi Selon. The stock trades about -0.08 of its potential returns per unit of risk. The Jiangxi Selon Industrial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  689.00  in Jiangxi Selon Industrial on October 10, 2024 and sell it today you would earn a total of  118.00  from holding Jiangxi Selon Industrial or generate 17.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Peoples Insurance of  vs.  Jiangxi Selon Industrial

Peoples Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peoples Insurance of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Peoples Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jiangxi Selon Industrial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Selon Industrial are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangxi Selon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peoples Insurance and Jiangxi Selon

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

The idea behind Peoples Insurance of and Jiangxi Selon Industrial 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.