Correlation Between Ping An and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Ping An and HANOVER INSURANCE 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 HANOVER INSURANCE 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 HANOVER INSURANCE, you can compare the effects of market volatilities on Ping An and HANOVER INSURANCE 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 HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and HANOVER INSURANCE.
Diversification Opportunities for Ping An and HANOVER INSURANCE
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ping and HANOVER is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE 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 HANOVER INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANOVER INSURANCE has no effect on the direction of Ping An i.e., Ping An and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Ping An and HANOVER INSURANCE
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.03 times more return on investment than HANOVER INSURANCE. However, Ping An is 1.03 times more volatile than HANOVER INSURANCE. It trades about 0.19 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.08 per unit of risk. If you would invest 542.00 in Ping An Insurance on November 27, 2024 and sell it today you would earn a total of 40.00 from holding Ping An Insurance or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ping An Insurance vs. HANOVER INSURANCE
Performance |
| Timeline |
| Ping An Insurance |
| HANOVER INSURANCE |
Ping An and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and HANOVER INSURANCE
The main advantage of trading using opposite Ping An and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, HANOVER INSURANCE 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 HANOVER INSURANCE will offset losses from the drop in HANOVER INSURANCE's long position.| Ping An vs. MidCap Financial Investment | Ping An vs. BOS BETTER ONLINE | Ping An vs. CODERE ONLINE LUX | Ping An vs. PACIFIC ONLINE |
| HANOVER INSURANCE vs. SOLSTAD OFFSHORE NK | HANOVER INSURANCE vs. Eidesvik Offshore ASA | HANOVER INSURANCE vs. URBAN OUTFITTERS | HANOVER INSURANCE vs. EIDESVIK OFFSHORE NK |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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