Correlation Between Ping An and Dongnan Electronics
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By analyzing existing cross correlation between Ping An Insurance and Dongnan Electronics Co, you can compare the effects of market volatilities on Ping An and Dongnan Electronics 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 Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Dongnan Electronics.
Diversification Opportunities for Ping An and Dongnan Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ping and Dongnan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan Electronics 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 Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of Ping An i.e., Ping An and Dongnan Electronics go up and down completely randomly.
Pair Corralation between Ping An and Dongnan Electronics
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Dongnan Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 2.53 times less risky than Dongnan Electronics. The stock trades about -0.14 of its potential returns per unit of risk. The Dongnan Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,336 in Dongnan Electronics Co on August 30, 2024 and sell it today you would earn a total of 88.00 from holding Dongnan Electronics Co or generate 3.77% 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. Dongnan Electronics Co
Performance |
| Timeline |
| Ping An Insurance |
| Dongnan Electronics |
Ping An and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Dongnan Electronics
The main advantage of trading using opposite Ping An and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Dongnan Electronics 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' long position.| Ping An vs. Kweichow Moutai Co | Ping An vs. Contemporary Amperex Technology | Ping An vs. G bits Network Technology | Ping An vs. BYD Co Ltd |
| Dongnan Electronics vs. PetroChina Co Ltd | Dongnan Electronics vs. China State Construction | Dongnan Electronics vs. China Mobile Limited | Dongnan Electronics vs. Industrial and Commercial |
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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