Correlation Between AIR PRODCHEMICALS and Ping An
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Ping An Insurance, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Ping An.
Diversification Opportunities for AIR PRODCHEMICALS and Ping An
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIR and Ping is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Ping An go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Ping An
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 4.56 times less return on investment than Ping An. But when comparing it to its historical volatility, AIR PRODCHEMICALS is 2.51 times less risky than Ping An. It trades about 0.05 of its potential returns per unit of risk. Ping An Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Ping An Insurance on September 4, 2024 and sell it today you would earn a total of 353.00 from holding Ping An Insurance or generate 184.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Ping An Insurance
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Ping An Insurance |
AIR PRODCHEMICALS and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Ping An
The main advantage of trading using opposite AIR PRODCHEMICALS and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. TOTAL GABON | AIR PRODCHEMICALS vs. Walgreens Boots Alliance | AIR PRODCHEMICALS vs. Peak Resources Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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