Correlation Between AIA Group and Sanlam
Can any of the company-specific risk be diversified away by investing in both AIA Group and Sanlam 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 AIA Group and Sanlam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIA Group Ltd and Sanlam Ltd PK, you can compare the effects of market volatilities on AIA Group and Sanlam 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 AIA Group with a short position of Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIA Group and Sanlam.
Diversification Opportunities for AIA Group and Sanlam
Very weak diversification
The 3 months correlation between AIA and Sanlam is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AIA Group Ltd and Sanlam Ltd PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Ltd PK and AIA Group 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 AIA Group Ltd are associated (or correlated) with Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Ltd PK has no effect on the direction of AIA Group i.e., AIA Group and Sanlam go up and down completely randomly.
Pair Corralation between AIA Group and Sanlam
Assuming the 90 days horizon AIA Group Ltd is expected to under-perform the Sanlam. In addition to that, AIA Group is 1.11 times more volatile than Sanlam Ltd PK. It trades about -0.3 of its total potential returns per unit of risk. Sanlam Ltd PK is currently generating about -0.09 per unit of volatility. If you would invest 1,011 in Sanlam Ltd PK on August 28, 2024 and sell it today you would lose (31.00) from holding Sanlam Ltd PK or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIA Group Ltd vs. Sanlam Ltd PK
Performance |
| Timeline |
| AIA Group |
| Sanlam Ltd PK |
AIA Group and Sanlam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIA Group and Sanlam
The main advantage of trading using opposite AIA Group and Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIA Group position performs unexpectedly, Sanlam 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 Sanlam will offset losses from the drop in Sanlam's long position.| AIA Group vs. CNO Financial Group | AIA Group vs. Genworth Financial | AIA Group vs. MetLife Preferred Stock | AIA Group vs. Prudential Public Limited |
| Sanlam vs. Ping An Insurance | Sanlam vs. CNO Financial Group | Sanlam vs. Genworth Financial | Sanlam vs. MetLife Preferred Stock |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |