Correlation Between AIA Group and Ping An
Can any of the company-specific risk be diversified away by investing in both AIA Group 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 AIA Group and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIA Group and Ping An Insurance, you can compare the effects of market volatilities on AIA Group 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 AIA Group with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIA Group and Ping An.
Diversification Opportunities for AIA Group and Ping An
Very poor diversification
The 3 months correlation between AIA and Ping is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AIA Group 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 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 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 AIA Group i.e., AIA Group and Ping An go up and down completely randomly.
Pair Corralation between AIA Group and Ping An
Assuming the 90 days horizon AIA Group is expected to under-perform the Ping An. But the pink sheet apears to be less risky and, when comparing its historical volatility, AIA Group is 1.07 times less risky than Ping An. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Ping An Insurance is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,173 in Ping An Insurance on August 24, 2024 and sell it today you would earn a total of 11.00 from holding Ping An Insurance or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
AIA Group vs. Ping An Insurance
Performance |
| Timeline |
| AIA Group |
| Ping An Insurance |
AIA Group and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIA Group and Ping An
The main advantage of trading using opposite AIA Group and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIA Group 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.| AIA Group vs. Ping An Insurance | AIA Group vs. AIA Group Ltd | AIA Group vs. CNO Financial Group | AIA Group vs. MetLife Preferred Stock |
| Ping An vs. AIA Group | Ping An vs. Jackson Financial | Ping An vs. Sanlam Ltd PK | Ping An vs. CNO Financial Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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