Correlation Between Ping An and Shanghai Construction
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By analyzing existing cross correlation between Ping An Insurance and Shanghai Construction Group, you can compare the effects of market volatilities on Ping An and Shanghai 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 Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Shanghai Construction.
Diversification Opportunities for Ping An and Shanghai Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ping and Shanghai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai 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 Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Ping An i.e., Ping An and Shanghai Construction go up and down completely randomly.
Pair Corralation between Ping An and Shanghai Construction
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Shanghai Construction. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.46 times less risky than Shanghai Construction. The stock trades about -0.15 of its potential returns per unit of risk. The Shanghai Construction Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 241.00 in Shanghai Construction Group on August 30, 2024 and sell it today you would earn a total of 19.00 from holding Shanghai Construction Group or generate 7.88% 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. Shanghai Construction Group
Performance |
| Timeline |
| Ping An Insurance |
| Shanghai Construction |
Ping An and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Shanghai Construction
The main advantage of trading using opposite Ping An and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Shanghai 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 Shanghai Construction will offset losses from the drop in Shanghai Construction's long position.| Ping An vs. Industrial and Commercial | Ping An vs. Agricultural Bank of | Ping An vs. China Construction Bank | Ping An vs. Bank of China |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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