Correlation Between British American and Ping An
Can any of the company-specific risk be diversified away by investing in both British American 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 British American and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Ping An Insurance, you can compare the effects of market volatilities on British American 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 British American with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Ping An.
Diversification Opportunities for British American and Ping An
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between British and Ping is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco 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 British American 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 British American Tobacco 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 British American i.e., British American and Ping An go up and down completely randomly.
Pair Corralation between British American and Ping An
Assuming the 90 days trading horizon British American is expected to generate 13.31 times less return on investment than Ping An. But when comparing it to its historical volatility, British American Tobacco is 3.42 times less risky than Ping An. It trades about 0.02 of its potential returns per unit of risk. Ping An Insurance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 195.00 in Ping An Insurance on September 14, 2024 and sell it today you would earn a total of 383.00 from holding Ping An Insurance or generate 196.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Ping An Insurance
Performance |
| Timeline |
| British American Tobacco |
| Ping An Insurance |
British American and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Ping An
The main advantage of trading using opposite British American and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American 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.| British American vs. Electronic Arts | British American vs. PKSHA TECHNOLOGY INC | British American vs. KIMBALL ELECTRONICS | British American vs. FANDIFI TECHNOLOGY P |
| Ping An vs. Singapore Reinsurance | Ping An vs. British American Tobacco | Ping An vs. HANOVER INSURANCE | Ping An vs. Ping An Insurance |
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.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |