Correlation Between Ping An and Soochow Suzhou
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By analyzing existing cross correlation between Ping An Insurance and Soochow Suzhou Industrial, you can compare the effects of market volatilities on Ping An and Soochow Suzhou 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 Soochow Suzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Soochow Suzhou.
Diversification Opportunities for Ping An and Soochow Suzhou
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and Soochow is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Soochow Suzhou Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soochow Suzhou Industrial 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 Soochow Suzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soochow Suzhou Industrial has no effect on the direction of Ping An i.e., Ping An and Soochow Suzhou go up and down completely randomly.
Pair Corralation between Ping An and Soochow Suzhou
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Soochow Suzhou. In addition to that, Ping An is 1.98 times more volatile than Soochow Suzhou Industrial. It trades about -0.21 of its total potential returns per unit of risk. Soochow Suzhou Industrial is currently generating about 0.16 per unit of volatility. If you would invest 338.00 in Soochow Suzhou Industrial on November 7, 2024 and sell it today you would earn a total of 23.00 from holding Soochow Suzhou Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Soochow Suzhou Industrial
Performance |
| Timeline |
| Ping An Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Soochow Suzhou Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Ping An and Soochow Suzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Soochow Suzhou
The main advantage of trading using opposite Ping An and Soochow Suzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Soochow Suzhou 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 Soochow Suzhou will offset losses from the drop in Soochow Suzhou's long position.The idea behind Ping An Insurance and Soochow Suzhou Industrial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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