Correlation Between American Public and Ping An
Can any of the company-specific risk be diversified away by investing in both American Public 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 American Public and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and Ping An Insurance, you can compare the effects of market volatilities on American Public 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 American Public with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Ping An.
Diversification Opportunities for American Public and Ping An
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Ping is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education 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 American Public 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 American Public Education 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 American Public i.e., American Public and Ping An go up and down completely randomly.
Pair Corralation between American Public and Ping An
Assuming the 90 days horizon American Public Education is expected to generate 0.76 times more return on investment than Ping An. However, American Public Education is 1.31 times less risky than Ping An. It trades about 0.6 of its potential returns per unit of risk. Ping An Insurance is currently generating about 0.09 per unit of risk. If you would invest 1,730 in American Public Education on September 15, 2024 and sell it today you would earn a total of 370.00 from holding American Public Education or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. Ping An Insurance
Performance |
| Timeline |
| American Public Education |
| Ping An Insurance |
American Public and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and Ping An
The main advantage of trading using opposite American Public and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public 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.| American Public vs. IDP EDUCATION LTD | American Public vs. Laureate Education | American Public vs. Superior Plus Corp | American Public vs. SIVERS SEMICONDUCTORS AB |
| Ping An vs. American Public Education | Ping An vs. Zoom Video Communications | Ping An vs. Xinhua Winshare Publishing | Ping An vs. MCEWEN MINING INC |
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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