Correlation Between GOODYEAR T and Ping An
Can any of the company-specific risk be diversified away by investing in both GOODYEAR T 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 GOODYEAR T and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODYEAR T RUBBER and Ping An Insurance, you can compare the effects of market volatilities on GOODYEAR T 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 GOODYEAR T with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODYEAR T and Ping An.
Diversification Opportunities for GOODYEAR T and Ping An
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GOODYEAR and Ping is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GOODYEAR T RUBBER 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 GOODYEAR T 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 GOODYEAR T RUBBER 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 GOODYEAR T i.e., GOODYEAR T and Ping An go up and down completely randomly.
Pair Corralation between GOODYEAR T and Ping An
Assuming the 90 days trading horizon GOODYEAR T RUBBER is expected to generate 1.13 times more return on investment than Ping An. However, GOODYEAR T is 1.13 times more volatile than Ping An Insurance. It trades about 0.46 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.05 per unit of risk. If you would invest 738.00 in GOODYEAR T RUBBER on September 1, 2024 and sell it today you would earn a total of 276.00 from holding GOODYEAR T RUBBER or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODYEAR T RUBBER vs. Ping An Insurance
Performance |
| Timeline |
| GOODYEAR T RUBBER |
| Ping An Insurance |
GOODYEAR T and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODYEAR T and Ping An
The main advantage of trading using opposite GOODYEAR T and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODYEAR T 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.| GOODYEAR T vs. Pure Storage | GOODYEAR T vs. DICKER DATA LTD | GOODYEAR T vs. PUBLIC STORAGE PRFO | GOODYEAR T vs. INFORMATION SVC GRP |
| Ping An vs. Meiko Electronics Co | Ping An vs. North American Construction | Ping An vs. Sterling Construction | Ping An vs. UET United Electronic |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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