Correlation Between WuXi AppTec and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec and SBI Insurance 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 WuXi AppTec and SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi AppTec Co and SBI Insurance Group, you can compare the effects of market volatilities on WuXi AppTec and SBI Insurance 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 WuXi AppTec with a short position of SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and SBI Insurance.
Diversification Opportunities for WuXi AppTec and SBI Insurance
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WuXi and SBI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group and WuXi AppTec 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 WuXi AppTec Co are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of WuXi AppTec i.e., WuXi AppTec and SBI Insurance go up and down completely randomly.
Pair Corralation between WuXi AppTec and SBI Insurance
Assuming the 90 days horizon WuXi AppTec Co is expected to generate 2.52 times more return on investment than SBI Insurance. However, WuXi AppTec is 2.52 times more volatile than SBI Insurance Group. It trades about 0.09 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.14 per unit of risk. If you would invest 595.00 in WuXi AppTec Co on December 2, 2024 and sell it today you would earn a total of 115.00 from holding WuXi AppTec Co or generate 19.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
WuXi AppTec Co vs. SBI Insurance Group
Performance |
Timeline |
WuXi AppTec |
SBI Insurance Group |
WuXi AppTec and SBI Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WuXi AppTec and SBI Insurance
The main advantage of trading using opposite WuXi AppTec and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.WuXi AppTec vs. ADRIATIC METALS LS 013355 | WuXi AppTec vs. Cleanaway Waste Management | WuXi AppTec vs. GALENA MINING LTD | WuXi AppTec vs. CVW CLEANTECH INC |
SBI Insurance vs. Sabre Insurance Group | SBI Insurance vs. UNIQA INSURANCE GR | SBI Insurance vs. AviChina Industry Technology | SBI Insurance vs. SMA Solar Technology |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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