Correlation Between Ping An and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Ping An and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Ping An and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Superior Plus.
Diversification Opportunities for Ping An and Superior Plus
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and Superior is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Ping An i.e., Ping An and Superior Plus go up and down completely randomly.
Pair Corralation between Ping An and Superior Plus
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.78 times less risky than Superior Plus. The stock trades about -0.11 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 428.00 in Superior Plus Corp on August 28, 2024 and sell it today you would lose (18.00) from holding Superior Plus Corp or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ping An Insurance vs. Superior Plus Corp
Performance |
| Timeline |
| Ping An Insurance |
| Superior Plus Corp |
Ping An and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Superior Plus
The main advantage of trading using opposite Ping An and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.The idea behind Ping An Insurance and Superior Plus Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Superior Plus vs. Canon Marketing Japan | Superior Plus vs. CANON MARKETING JP | Superior Plus vs. KRISPY KREME DL 01 | Superior Plus vs. SIDETRADE EO 1 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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