Correlation Between Ping An and Life Insurance
Can any of the company-specific risk be diversified away by investing in both Ping An and Life Insurance 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 Ping An and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Life Insurance, you can compare the effects of market volatilities on Ping An and Life Insurance 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 Ping An with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Life Insurance.
Diversification Opportunities for Ping An and Life Insurance
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ping and Life is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Ping An 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 Ping An Insurance are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Ping An i.e., Ping An and Life Insurance go up and down completely randomly.
Pair Corralation between Ping An and Life Insurance
Assuming the 90 days horizon Ping An Insurance is expected to under-perform the Life Insurance. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.18 times less risky than Life Insurance. The pink sheet trades about -0.37 of its potential returns per unit of risk. The Life Insurance is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Life Insurance on August 26, 2024 and sell it today you would earn a total of 100.00 from holding Life Insurance or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Life Insurance
Performance |
| Timeline |
| Ping An Insurance |
| Life Insurance |
Ping An and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Life Insurance
The main advantage of trading using opposite Ping An and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| Ping An vs. Ping An Insurance | Ping An vs. CNO Financial Group | Ping An vs. Genworth Financial | Ping An vs. MetLife Preferred Stock |
| Life Insurance vs. Ping An Insurance | Life Insurance vs. CNO Financial Group | Life Insurance vs. Genworth Financial | Life Insurance vs. MetLife Preferred Stock |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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