Correlation Between Ping An and Power Of
Can any of the company-specific risk be diversified away by investing in both Ping An and Power Of 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 Power Of 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 Power of, you can compare the effects of market volatilities on Ping An and Power Of 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 Power Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Power Of.
Diversification Opportunities for Ping An and Power Of
Very weak diversification
The 3 months correlation between Ping and Power is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Power of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Of 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 Power Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Of has no effect on the direction of Ping An i.e., Ping An and Power Of go up and down completely randomly.
Pair Corralation between Ping An and Power Of
Assuming the 90 days horizon Ping An Insurance is expected to generate 2.75 times more return on investment than Power Of. However, Ping An is 2.75 times more volatile than Power of. It trades about 0.07 of its potential returns per unit of risk. Power of is currently generating about 0.08 per unit of risk. If you would invest 789.00 in Ping An Insurance on September 12, 2024 and sell it today you would earn a total of 441.00 from holding Ping An Insurance or generate 55.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ping An Insurance vs. Power of
Performance |
| Timeline |
| Ping An Insurance |
| Power Of |
Ping An and Power Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Power Of
The main advantage of trading using opposite Ping An and Power Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Power Of 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 Power Of will offset losses from the drop in Power Of'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 |
| Power Of vs. Manulife Financial | Power Of vs. Manulife Financial | Power Of vs. Ping An Insurance | Power Of vs. Prudential PLC ADR |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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