Correlation Between Ping An and Hongrun Construction
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By analyzing existing cross correlation between Ping An Insurance and Hongrun Construction Group, you can compare the effects of market volatilities on Ping An and Hongrun Construction 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 Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Hongrun Construction.
Diversification Opportunities for Ping An and Hongrun Construction
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ping and Hongrun is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction 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 Insurance are associated (or correlated) with Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of Ping An i.e., Ping An and Hongrun Construction go up and down completely randomly.
Pair Corralation between Ping An and Hongrun Construction
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Hongrun Construction. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.44 times less risky than Hongrun Construction. The stock trades about -0.16 of its potential returns per unit of risk. The Hongrun Construction Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Hongrun Construction Group on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Hongrun Construction Group or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Hongrun Construction Group
Performance |
| Timeline |
| Ping An Insurance |
| Hongrun Construction |
Ping An and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Hongrun Construction
The main advantage of trading using opposite Ping An and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Hongrun Construction 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| Ping An vs. Ming Yang Smart | Ping An vs. 159681 | Ping An vs. 159005 | Ping An vs. Loctek Ergonomic Technology |
| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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