Correlation Between Ping An and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Ping An and Atlas Copco 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 Atlas Copco 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 Atlas Copco A, you can compare the effects of market volatilities on Ping An and Atlas Copco 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 Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Atlas Copco.
Diversification Opportunities for Ping An and Atlas Copco
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ping and Atlas is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Atlas Copco A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco A 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 Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco A has no effect on the direction of Ping An i.e., Ping An and Atlas Copco go up and down completely randomly.
Pair Corralation between Ping An and Atlas Copco
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.38 times more return on investment than Atlas Copco. However, Ping An is 1.38 times more volatile than Atlas Copco A. It trades about 0.08 of its potential returns per unit of risk. Atlas Copco A is currently generating about 0.04 per unit of risk. If you would invest 236.00 in Ping An Insurance on September 12, 2024 and sell it today you would earn a total of 345.00 from holding Ping An Insurance or generate 146.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Atlas Copco A
Performance |
| Timeline |
| Ping An Insurance |
| Atlas Copco A |
Ping An and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Atlas Copco
The main advantage of trading using opposite Ping An and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| Ping An vs. Nippon Steel | Ping An vs. REVO INSURANCE SPA | Ping An vs. ALGOMA STEEL GROUP | Ping An vs. LEGACY IRON ORE |
| Atlas Copco vs. Ping An Insurance | Atlas Copco vs. REVO INSURANCE SPA | Atlas Copco vs. Lion One Metals | Atlas Copco vs. ZURICH INSURANCE GROUP |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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