Correlation Between Harbin Hatou and Peoples Insurance

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

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

Diversification Opportunities for Harbin Hatou and Peoples Insurance

0.92

Correlation Coefficient

Harbin Hatou  Peoples Insurance

Almost no diversification

The 3 months correlation between Harbin and Peoples is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Harbin Hatou Investment and Peoples Insurance of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance and Harbin Hatou 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 Harbin Hatou Investment are associated (or correlated) with Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of Harbin Hatou i.e., Harbin Hatou and Peoples Insurance go up and down completely randomly.

Pair Corralation between Harbin Hatou and Peoples Insurance

Assuming the 90 days trading horizon Harbin Hatou Investment is expected to generate 1.29 times more return on investment than Peoples Insurance. However, Harbin Hatou is 1.29 times more volatile than Peoples Insurance of. It trades about 0.18 of its potential returns per unit of risk. Peoples Insurance of is currently generating about 0.11 per unit of risk. If you would invest  465.00  in Harbin Hatou Investment on September 2, 2024 and sell it today you would earn a total of  207.00  from holding Harbin Hatou Investment or generate 44.52% return on investment over 90 days.

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

Harbin Hatou Investment  vs.  Peoples Insurance of

Harbin Hatou Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbin Hatou Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harbin Hatou sustained solid returns over the last few months and may actually be approaching a breakup point.

Peoples Insurance

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Insurance of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Peoples Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harbin Hatou and Peoples Insurance

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

The idea behind Harbin Hatou Investment and Peoples Insurance of 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.