Correlation Between Ping An and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Ping An and Volkswagen 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 Volkswagen 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 Volkswagen AG, you can compare the effects of market volatilities on Ping An and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Volkswagen.
Diversification Opportunities for Ping An and Volkswagen
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and Volkswagen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Ping An i.e., Ping An and Volkswagen go up and down completely randomly.
Pair Corralation between Ping An and Volkswagen
Assuming the 90 days horizon Ping An Insurance is expected to generate 2.35 times more return on investment than Volkswagen. However, Ping An is 2.35 times more volatile than Volkswagen AG. It trades about -0.01 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.33 per unit of risk. If you would invest 564.00 in Ping An Insurance on September 4, 2024 and sell it today you would lose (7.00) from holding Ping An Insurance or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Volkswagen AG
Performance |
| Timeline |
| Ping An Insurance |
| Volkswagen AG |
Ping An and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Volkswagen
The main advantage of trading using opposite Ping An and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Ping An vs. Sanyo Chemical Industries | Ping An vs. CHEMICAL INDUSTRIES | Ping An vs. Silicon Motion Technology | Ping An vs. Wayside Technology Group |
| Volkswagen vs. SOUTHWEST AIRLINES | Volkswagen vs. MITSUBISHI STEEL MFG | Volkswagen vs. Nok Airlines PCL | Volkswagen vs. Daido Steel Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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