Correlation Between Algonquin Power and Ping An
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Ping An at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Algonquin Power and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and Ping An Insurance, you can compare the effects of market volatilities on Algonquin Power and Ping An 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 Algonquin Power with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Ping An.
Diversification Opportunities for Algonquin Power and Ping An
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and Ping is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance and Algonquin Power 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 Algonquin Power Utilities are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Algonquin Power i.e., Algonquin Power and Ping An go up and down completely randomly.
Pair Corralation between Algonquin Power and Ping An
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the Ping An. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 1.87 times less risky than Ping An. The stock trades about -0.15 of its potential returns per unit of risk. The Ping An Insurance is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 552.00 in Ping An Insurance on September 15, 2024 and sell it today you would earn a total of 14.00 from holding Ping An Insurance or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Ping An Insurance
Performance |
| Timeline |
| Algonquin Power Utilities |
| Ping An Insurance |
Algonquin Power and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Ping An
The main advantage of trading using opposite Algonquin Power and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. SIVERS SEMICONDUCTORS AB | Algonquin Power vs. Norsk Hydro ASA | Algonquin Power vs. Reliance Steel Aluminum |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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