Correlation Between PT Global and Ping An
Can any of the company-specific risk be diversified away by investing in both PT Global and Ping An 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 PT Global and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and Ping An Insurance, you can compare the effects of market volatilities on PT Global and Ping An 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 PT Global with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and Ping An.
Diversification Opportunities for PT Global and Ping An
Weak diversification
The 3 months correlation between 06L and Ping is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance and PT Global 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 PT Global Mediacom are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of PT Global i.e., PT Global and Ping An go up and down completely randomly.
Pair Corralation between PT Global and Ping An
Assuming the 90 days trading horizon PT Global Mediacom is expected to generate 3.7 times more return on investment than Ping An. However, PT Global is 3.7 times more volatile than Ping An Insurance. It trades about -0.05 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.23 per unit of risk. If you would invest 0.60 in PT Global Mediacom on October 24, 2024 and sell it today you would lose (0.05) from holding PT Global Mediacom or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Global Mediacom vs. Ping An Insurance
Performance |
| Timeline |
| PT Global Mediacom |
| Ping An Insurance |
PT Global and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Global and Ping An
The main advantage of trading using opposite PT Global and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| PT Global vs. Iridium Communications | PT Global vs. Tencent Music Entertainment | PT Global vs. Zoom Video Communications | PT Global vs. Cairo Communication SpA |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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