Correlation Between ARROW ELECTRONICS and Ping An
Can any of the company-specific risk be diversified away by investing in both ARROW ELECTRONICS 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 ARROW ELECTRONICS and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARROW ELECTRONICS and Ping An Insurance, you can compare the effects of market volatilities on ARROW ELECTRONICS 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 ARROW ELECTRONICS with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARROW ELECTRONICS and Ping An.
Diversification Opportunities for ARROW ELECTRONICS and Ping An
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ARROW and Ping is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ARROW ELECTRONICS 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 ARROW ELECTRONICS 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 ARROW ELECTRONICS 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 ARROW ELECTRONICS i.e., ARROW ELECTRONICS and Ping An go up and down completely randomly.
Pair Corralation between ARROW ELECTRONICS and Ping An
Assuming the 90 days trading horizon ARROW ELECTRONICS is expected to generate 3.67 times more return on investment than Ping An. However, ARROW ELECTRONICS is 3.67 times more volatile than Ping An Insurance. It trades about 0.04 of its potential returns per unit of risk. Ping An Insurance is currently generating about 0.12 per unit of risk. If you would invest 11,200 in ARROW ELECTRONICS on September 14, 2024 and sell it today you would earn a total of 500.00 from holding ARROW ELECTRONICS or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARROW ELECTRONICS vs. Ping An Insurance
Performance |
| Timeline |
| ARROW ELECTRONICS |
| Ping An Insurance |
ARROW ELECTRONICS and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARROW ELECTRONICS and Ping An
The main advantage of trading using opposite ARROW ELECTRONICS and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARROW ELECTRONICS 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.| ARROW ELECTRONICS vs. Apple Inc | ARROW ELECTRONICS vs. Apple Inc | ARROW ELECTRONICS vs. Apple Inc | ARROW ELECTRONICS vs. Apple Inc |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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