Correlation Between Ping An and Meituan ADR
Can any of the company-specific risk be diversified away by investing in both Ping An and Meituan ADR 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 Meituan ADR 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 Meituan ADR, you can compare the effects of market volatilities on Ping An and Meituan ADR 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 Meituan ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Meituan ADR.
Diversification Opportunities for Ping An and Meituan ADR
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ping and Meituan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Meituan ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan ADR 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 Meituan ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meituan ADR has no effect on the direction of Ping An i.e., Ping An and Meituan ADR go up and down completely randomly.
Pair Corralation between Ping An and Meituan ADR
Assuming the 90 days horizon Ping An Insurance is expected to generate 0.82 times more return on investment than Meituan ADR. However, Ping An Insurance is 1.22 times less risky than Meituan ADR. It trades about 0.01 of its potential returns per unit of risk. Meituan ADR is currently generating about 0.01 per unit of risk. If you would invest 1,155 in Ping An Insurance on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Ping An Insurance or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Meituan ADR
Performance |
| Timeline |
| Ping An Insurance |
| Meituan ADR |
Ping An and Meituan ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Meituan ADR
The main advantage of trading using opposite Ping An and Meituan ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Meituan ADR 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 Meituan ADR will offset losses from the drop in Meituan ADR'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 |
| Meituan ADR vs. Jd Com Inc | Meituan ADR vs. MOGU Inc | Meituan ADR vs. Oriental Culture Holding | Meituan ADR vs. Alibaba Group Holding |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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