Correlation Between Ping An and Shenzhen MTC
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By analyzing existing cross correlation between Ping An Insurance and Shenzhen MTC Co, you can compare the effects of market volatilities on Ping An and Shenzhen MTC 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 Shenzhen MTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Shenzhen MTC.
Diversification Opportunities for Ping An and Shenzhen MTC
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ping and Shenzhen is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Shenzhen MTC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MTC 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 Shenzhen MTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MTC has no effect on the direction of Ping An i.e., Ping An and Shenzhen MTC go up and down completely randomly.
Pair Corralation between Ping An and Shenzhen MTC
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.65 times more return on investment than Shenzhen MTC. However, Ping An Insurance is 1.55 times less risky than Shenzhen MTC. It trades about 0.01 of its potential returns per unit of risk. Shenzhen MTC Co is currently generating about -0.04 per unit of risk. If you would invest 5,017 in Ping An Insurance on November 8, 2024 and sell it today you would earn a total of 8.00 from holding Ping An Insurance or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Ping An Insurance vs. Shenzhen MTC Co
Performance |
| Timeline |
| Ping An Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen MTC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ping An and Shenzhen MTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Shenzhen MTC
The main advantage of trading using opposite Ping An and Shenzhen MTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Shenzhen MTC 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 Shenzhen MTC will offset losses from the drop in Shenzhen MTC's long position.The idea behind Ping An Insurance and Shenzhen MTC Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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