Correlation Between CHINA PACINGRGDR5 and SANLAM
Can any of the company-specific risk be diversified away by investing in both CHINA PACINGRGDR5 and SANLAM 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 CHINA PACINGRGDR5 and SANLAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA PACINGRGDR5 YC1 and SANLAM LTD RC 01, you can compare the effects of market volatilities on CHINA PACINGRGDR5 and SANLAM 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 CHINA PACINGRGDR5 with a short position of SANLAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA PACINGRGDR5 and SANLAM.
Diversification Opportunities for CHINA PACINGRGDR5 and SANLAM
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and SANLAM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CHINA PACINGRGDR5 YC1 and SANLAM LTD RC 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANLAM LTD RC and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 YC1 are associated (or correlated) with SANLAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANLAM LTD RC has no effect on the direction of CHINA PACINGRGDR5 i.e., CHINA PACINGRGDR5 and SANLAM go up and down completely randomly.
Pair Corralation between CHINA PACINGRGDR5 and SANLAM
Assuming the 90 days trading horizon CHINA PACINGRGDR5 YC1 is expected to generate 1.03 times more return on investment than SANLAM. However, CHINA PACINGRGDR5 is 1.03 times more volatile than SANLAM LTD RC 01. It trades about 0.19 of its potential returns per unit of risk. SANLAM LTD RC 01 is currently generating about 0.1 per unit of risk. If you would invest 1,727 in CHINA PACINGRGDR5 YC1 on April 25, 2025 and sell it today you would earn a total of 393.00 from holding CHINA PACINGRGDR5 YC1 or generate 22.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CHINA PACINGRGDR5 YC1 vs. SANLAM LTD RC 01
Performance |
Timeline |
CHINA PACINGRGDR5 YC1 |
SANLAM LTD RC |
CHINA PACINGRGDR5 and SANLAM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA PACINGRGDR5 and SANLAM
The main advantage of trading using opposite CHINA PACINGRGDR5 and SANLAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA PACINGRGDR5 position performs unexpectedly, SANLAM 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 SANLAM will offset losses from the drop in SANLAM's long position.CHINA PACINGRGDR5 vs. UNIVERSAL DISPLAY | CHINA PACINGRGDR5 vs. MagnaChip Semiconductor Corp | CHINA PACINGRGDR5 vs. Tower Semiconductor | CHINA PACINGRGDR5 vs. Nordic Semiconductor ASA |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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