Correlation Between China Life and Ping An
Can any of the company-specific risk be diversified away by investing in both China Life 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 China Life and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Life Insurance and Ping An Insurance, you can compare the effects of market volatilities on China Life 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 China Life with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Ping An.
Diversification Opportunities for China Life and Ping An
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Ping is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance 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 China Life 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 China Life Insurance 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 China Life i.e., China Life and Ping An go up and down completely randomly.
Pair Corralation between China Life and Ping An
Assuming the 90 days horizon China Life Insurance is expected to under-perform the Ping An. But the pink sheet apears to be less risky and, when comparing its historical volatility, China Life Insurance is 1.05 times less risky than Ping An. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Ping An Insurance is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,237 in Ping An Insurance on August 31, 2024 and sell it today you would lose (63.00) from holding Ping An Insurance or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Ping An Insurance
Performance |
| Timeline |
| China Life Insurance |
| Ping An Insurance |
China Life and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Ping An
The main advantage of trading using opposite China Life and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life 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.| China Life vs. CNO Financial Group | China Life vs. Ping An Insurance | China Life vs. Lincoln National | China Life vs. AIA Group Ltd |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |