Correlation Between New Residential and Ping An
Can any of the company-specific risk be diversified away by investing in both New Residential 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 New Residential and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and Ping An Healthcare, you can compare the effects of market volatilities on New Residential 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 New Residential with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Ping An.
Diversification Opportunities for New Residential and Ping An
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Ping is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare and New Residential 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 New Residential Investment 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 Healthcare has no effect on the direction of New Residential i.e., New Residential and Ping An go up and down completely randomly.
Pair Corralation between New Residential and Ping An
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.16 times more return on investment than Ping An. However, New Residential Investment is 6.13 times less risky than Ping An. It trades about 0.01 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.02 per unit of risk. If you would invest 1,036 in New Residential Investment on September 21, 2024 and sell it today you would earn a total of 0.00 from holding New Residential Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.08% |
| Values | Daily Returns |
New Residential Investment vs. Ping An Healthcare
Performance |
| Timeline |
| New Residential Inve |
| Ping An Healthcare |
New Residential and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Ping An
The main advantage of trading using opposite New Residential and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential 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.| New Residential vs. PLAYTIKA HOLDING DL 01 | New Residential vs. Nine Dragons Paper | New Residential vs. Sunstone Hotel Investors | New Residential vs. Onxeo SA |
| Ping An vs. REVO INSURANCE SPA | Ping An vs. CREDIT AGRICOLE | Ping An vs. CDN IMPERIAL BANK | Ping An vs. TFS FINANCIAL |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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