Correlation Between Ping An and American Public
Can any of the company-specific risk be diversified away by investing in both Ping An and American Public 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 Public 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 Public Education, you can compare the effects of market volatilities on Ping An and American Public 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 Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and American Public.
Diversification Opportunities for Ping An and American Public
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ping and American is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education 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 Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of Ping An i.e., Ping An and American Public go up and down completely randomly.
Pair Corralation between Ping An and American Public
Assuming the 90 days horizon Ping An is expected to generate 5.02 times less return on investment than American Public. In addition to that, Ping An is 1.31 times more volatile than American Public Education. It trades about 0.09 of its total potential returns per unit of risk. American Public Education is currently generating about 0.6 per unit of volatility. If you would invest 1,730 in American Public Education on September 15, 2024 and sell it today you would earn a total of 370.00 from holding American Public Education or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. American Public Education
Performance |
| Timeline |
| Ping An Insurance |
| American Public Education |
Ping An and American Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and American Public
The main advantage of trading using opposite Ping An and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, American Public 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 Public will offset losses from the drop in American Public's long position.| Ping An vs. American Public Education | Ping An vs. Zoom Video Communications | Ping An vs. Xinhua Winshare Publishing | Ping An vs. MCEWEN MINING INC |
| American Public vs. IDP EDUCATION LTD | American Public vs. Laureate Education | American Public vs. Superior Plus Corp | American Public vs. SIVERS SEMICONDUCTORS AB |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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