Correlation Between Tokio Marine and PICC Property
Can any of the company-specific risk be diversified away by investing in both Tokio Marine and PICC Property 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 Tokio Marine and PICC Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokio Marine Holdings and PICC Property and, you can compare the effects of market volatilities on Tokio Marine and PICC Property 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 Tokio Marine with a short position of PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokio Marine and PICC Property.
Diversification Opportunities for Tokio Marine and PICC Property
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tokio and PICC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tokio Marine Holdings and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property and Tokio Marine 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 Tokio Marine Holdings are associated (or correlated) with PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of Tokio Marine i.e., Tokio Marine and PICC Property go up and down completely randomly.
Pair Corralation between Tokio Marine and PICC Property
Assuming the 90 days horizon Tokio Marine Holdings is expected to generate 2.08 times more return on investment than PICC Property. However, Tokio Marine is 2.08 times more volatile than PICC Property and. It trades about 0.06 of its potential returns per unit of risk. PICC Property and is currently generating about 0.04 per unit of risk. If you would invest 1,586 in Tokio Marine Holdings on February 7, 2024 and sell it today you would earn a total of 1,546 from holding Tokio Marine Holdings or generate 97.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 97.21% |
Values | Daily Returns |
Tokio Marine Holdings vs. PICC Property and
Performance |
Timeline |
Tokio Marine Holdings |
PICC Property |
Tokio Marine and PICC Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tokio Marine and PICC Property
The main advantage of trading using opposite Tokio Marine and PICC Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokio Marine position performs unexpectedly, PICC Property 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 PICC Property will offset losses from the drop in PICC Property's long position.Tokio Marine vs. Root Inc | Tokio Marine vs. Comfort Systems USA | Tokio Marine vs. Interface | Tokio Marine vs. Natures Sunshine Products |
PICC Property vs. Root Inc | PICC Property vs. Comfort Systems USA | PICC Property vs. Interface | PICC Property vs. Natures Sunshine Products |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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