Correlation Between Ping An and American Equity
Can any of the company-specific risk be diversified away by investing in both Ping An and American Equity 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 American Equity 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 American Equity Investment, you can compare the effects of market volatilities on Ping An and American Equity 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 American Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and American Equity.
Diversification Opportunities for Ping An and American Equity
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ping and American is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and American Equity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Equity Inve 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 American Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Equity Inve has no effect on the direction of Ping An i.e., Ping An and American Equity go up and down completely randomly.
Pair Corralation between Ping An and American Equity
If you would invest 901.00 in Ping An Insurance on August 28, 2024 and sell it today you would earn a total of 234.00 from holding Ping An Insurance or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
Ping An Insurance vs. American Equity Investment
Performance |
| Timeline |
| Ping An Insurance |
| American Equity Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ping An and American Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and American Equity
The main advantage of trading using opposite Ping An and American Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, American Equity 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 American Equity will offset losses from the drop in American Equity's long position.| Ping An vs. AIA Group | Ping An vs. Jackson Financial | Ping An vs. Sanlam Ltd PK | Ping An vs. CNO Financial Group |
| American Equity vs. MetLife Preferred Stock | American Equity vs. Prudential Public Limited | American Equity vs. MetLife Preferred Stock | American Equity vs. Jackson Financial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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