Correlation Between Ping An and China Railway
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By analyzing existing cross correlation between Ping An Insurance and China Railway Construction, you can compare the effects of market volatilities on Ping An and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and China Railway.
Diversification Opportunities for Ping An and China Railway
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ping and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Ping An i.e., Ping An and China Railway go up and down completely randomly.
Pair Corralation between Ping An and China Railway
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the China Railway. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.4 times less risky than China Railway. The stock trades about -0.18 of its potential returns per unit of risk. The China Railway Construction is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 924.00 in China Railway Construction on August 28, 2024 and sell it today you would lose (8.00) from holding China Railway Construction or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. China Railway Construction
Performance |
| Timeline |
| Ping An Insurance |
| China Railway Constr |
Ping An and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and China Railway
The main advantage of trading using opposite Ping An and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Ping An vs. Ming Yang Smart | Ping An vs. 159681 | Ping An vs. 159005 | Ping An vs. Loctek Ergonomic Technology |
| China Railway vs. Chengtun Mining Group | China Railway vs. Shengda Mining Co | China Railway vs. Juewei Food Co | China Railway vs. Guangdong Jingyi Metal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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