Correlation Between Ping An and Allied Machinery
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By analyzing existing cross correlation between Ping An Insurance and Allied Machinery Co, you can compare the effects of market volatilities on Ping An and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Allied Machinery.
Diversification Opportunities for Ping An and Allied Machinery
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ping and Allied is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Ping An i.e., Ping An and Allied Machinery go up and down completely randomly.
Pair Corralation between Ping An and Allied Machinery
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Allied Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.2 times less risky than Allied Machinery. The stock trades about -0.1 of its potential returns per unit of risk. The Allied Machinery Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,514 in Allied Machinery Co on September 1, 2024 and sell it today you would earn a total of 119.00 from holding Allied Machinery Co or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Allied Machinery Co
Performance |
| Timeline |
| Ping An Insurance |
| Allied Machinery |
Ping An and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Allied Machinery
The main advantage of trading using opposite Ping An and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Ping An vs. Industrial and Commercial | Ping An vs. China Construction Bank | Ping An vs. Bank of China | Ping An vs. Agricultural Bank of |
| Allied Machinery vs. New China Life | Allied Machinery vs. Ming Yang Smart | Allied Machinery vs. 159681 | Allied Machinery vs. 159005 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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