Correlation Between Ping An and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ping An and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Ping An and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Dow Jones.
Diversification Opportunities for Ping An and Dow Jones
Poor diversification
The 3 months correlation between Ping and Dow is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Ping An i.e., Ping An and Dow Jones go up and down completely randomly.
Pair Corralation between Ping An and Dow Jones
Assuming the 90 days horizon Ping An Insurance is expected to generate 4.47 times more return on investment than Dow Jones. However, Ping An is 4.47 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 856.00 in Ping An Insurance on August 27, 2024 and sell it today you would earn a total of 282.00 from holding Ping An Insurance or generate 32.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Dow Jones Industrial
Performance |
| Timeline |
Ping An and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ping An Insurance
Pair trading matchups for Ping An
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ping An and Dow Jones
The main advantage of trading using opposite Ping An and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Ping An vs. CNO Financial Group | Ping An vs. Genworth Financial | Ping An vs. MetLife Preferred Stock | Ping An vs. Prudential Public Limited |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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