Correlation Between Ping An and Sanlam
Can any of the company-specific risk be diversified away by investing in both Ping An and Sanlam 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 Sanlam 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 Sanlam Ltd PK, you can compare the effects of market volatilities on Ping An and Sanlam 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 Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Sanlam.
Diversification Opportunities for Ping An and Sanlam
Poor diversification
The 3 months correlation between Ping and Sanlam is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Sanlam Ltd PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Ltd PK 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 Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Ltd PK has no effect on the direction of Ping An i.e., Ping An and Sanlam go up and down completely randomly.
Pair Corralation between Ping An and Sanlam
Assuming the 90 days horizon Ping An Insurance is expected to generate 1.53 times more return on investment than Sanlam. However, Ping An is 1.53 times more volatile than Sanlam Ltd PK. It trades about 0.06 of its potential returns per unit of risk. Sanlam Ltd PK is currently generating about 0.05 per unit of risk. If you would invest 826.00 in Ping An Insurance on November 2, 2024 and sell it today you would earn a total of 305.00 from holding Ping An Insurance or generate 36.92% 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. Sanlam Ltd PK
Performance |
| Timeline |
| Ping An Insurance |
| Sanlam Ltd PK |
Ping An and Sanlam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Sanlam
The main advantage of trading using opposite Ping An and Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Sanlam 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 Sanlam will offset losses from the drop in Sanlam'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 |
| Sanlam vs. Ping An Insurance | Sanlam vs. CNO Financial Group | Sanlam vs. Genworth Financial | Sanlam vs. MetLife Preferred Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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