Correlation Between Ping An and Hunan Fangsheng
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By analyzing existing cross correlation between Ping An Insurance and Hunan Fangsheng Pharm, you can compare the effects of market volatilities on Ping An and Hunan Fangsheng 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 Hunan Fangsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Hunan Fangsheng.
Diversification Opportunities for Ping An and Hunan Fangsheng
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ping and Hunan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Hunan Fangsheng Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Fangsheng Pharm 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 Hunan Fangsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Fangsheng Pharm has no effect on the direction of Ping An i.e., Ping An and Hunan Fangsheng go up and down completely randomly.
Pair Corralation between Ping An and Hunan Fangsheng
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.7 times more return on investment than Hunan Fangsheng. However, Ping An Insurance is 1.42 times less risky than Hunan Fangsheng. It trades about -0.14 of its potential returns per unit of risk. Hunan Fangsheng Pharm is currently generating about -0.17 per unit of risk. If you would invest 5,840 in Ping An Insurance on September 12, 2024 and sell it today you would lose (278.00) from holding Ping An Insurance or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ping An Insurance vs. Hunan Fangsheng Pharm
Performance |
| Timeline |
| Ping An Insurance |
| Hunan Fangsheng Pharm |
Ping An and Hunan Fangsheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Hunan Fangsheng
The main advantage of trading using opposite Ping An and Hunan Fangsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Hunan Fangsheng 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 Hunan Fangsheng will offset losses from the drop in Hunan Fangsheng's long position.| Ping An vs. China Petroleum Chemical | Ping An vs. PetroChina Co Ltd | Ping An vs. China Mobile Limited | Ping An vs. Industrial and Commercial |
| Hunan Fangsheng vs. Chinese Universe Publishing | Hunan Fangsheng vs. Ping An Insurance | Hunan Fangsheng vs. Suzhou Douson Drilling | Hunan Fangsheng vs. Jiangsu Phoenix Publishing |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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