Correlation Between Ping An and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both Ping An and CarsalesCom 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 Ping An and CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Healthcare and CarsalesCom, you can compare the effects of market volatilities on Ping An and CarsalesCom 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 Ping An with a short position of CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and CarsalesCom.
Diversification Opportunities for Ping An and CarsalesCom
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ping and CarsalesCom is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Healthcare and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom and Ping An 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 Ping An Healthcare are associated (or correlated) with CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Ping An i.e., Ping An and CarsalesCom go up and down completely randomly.
Pair Corralation between Ping An and CarsalesCom
Assuming the 90 days horizon Ping An Healthcare is expected to under-perform the CarsalesCom. In addition to that, Ping An is 9.33 times more volatile than CarsalesCom. It trades about -0.17 of its total potential returns per unit of risk. CarsalesCom is currently generating about -0.1 per unit of volatility. If you would invest 2,440 in CarsalesCom on September 13, 2024 and sell it today you would lose (80.00) from holding CarsalesCom or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Healthcare vs. CarsalesCom
Performance |
| Timeline |
| Ping An Healthcare |
| CarsalesCom |
Ping An and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and CarsalesCom
The main advantage of trading using opposite Ping An and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| Ping An vs. Iridium Communications | Ping An vs. China Communications Services | Ping An vs. BOSTON BEER A | Ping An vs. Citic Telecom International |
| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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