Correlation Between North American and Ping An
Can any of the company-specific risk be diversified away by investing in both North 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 North 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 North American Construction and Ping An Insurance, you can compare the effects of market volatilities on North 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 North American with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Ping An.
Diversification Opportunities for North American and Ping An
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between North and Ping is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction 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 North 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 North American Construction 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 North American i.e., North American and Ping An go up and down completely randomly.
Pair Corralation between North American and Ping An
Assuming the 90 days horizon North American Construction is expected to under-perform the Ping An. In addition to that, North American is 1.35 times more volatile than Ping An Insurance. It trades about -0.17 of its total potential returns per unit of risk. Ping An Insurance is currently generating about -0.07 per unit of volatility. If you would invest 555.00 in Ping An Insurance on November 3, 2024 and sell it today you would lose (16.00) from holding Ping An Insurance or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. Ping An Insurance
Performance |
| Timeline |
| North American Const |
| Ping An Insurance |
North American and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Ping An
The main advantage of trading using opposite North American and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North 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.| North American vs. ScanSource | North American vs. China National Building | North American vs. Sumitomo Rubber Industries | North American vs. TITANIUM TRANSPORTGROUP |
| Ping An vs. AIA Group Limited | Ping An vs. China Life Insurance | Ping An vs. MetLife | Ping An vs. Prudential plc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| 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 | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |