Correlation Between Prudential Financial and Ping An
Can any of the company-specific risk be diversified away by investing in both Prudential Financial 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 Prudential Financial and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and Ping An Insurance, you can compare the effects of market volatilities on Prudential Financial 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 Prudential Financial with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and Ping An.
Diversification Opportunities for Prudential Financial and Ping An
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Ping is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial 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 Prudential Financial 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 Prudential Financial 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 Prudential Financial i.e., Prudential Financial and Ping An go up and down completely randomly.
Pair Corralation between Prudential Financial and Ping An
Assuming the 90 days horizon Prudential Financial is expected to generate 2.78 times less return on investment than Ping An. But when comparing it to its historical volatility, Prudential Financial is 2.83 times less risky than Ping An. It trades about 0.08 of its potential returns per unit of risk. Ping An Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 238.00 in Ping An Insurance on September 12, 2024 and sell it today you would earn a total of 352.00 from holding Ping An Insurance or generate 147.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Financial vs. Ping An Insurance
Performance |
| Timeline |
| Prudential Financial |
| Ping An Insurance |
Prudential Financial and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and Ping An
The main advantage of trading using opposite Prudential Financial and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial 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.| Prudential Financial vs. Superior Plus Corp | Prudential Financial vs. SIVERS SEMICONDUCTORS AB | Prudential Financial vs. CHINA HUARONG ENERHD 50 | Prudential Financial vs. NORDIC HALIBUT AS |
| Ping An vs. Superior Plus Corp | Ping An vs. SIVERS SEMICONDUCTORS AB | Ping An vs. CHINA HUARONG ENERHD 50 | Ping An vs. NORDIC HALIBUT AS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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