Correlation Between Ping An and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both Ping An and AM EAGLE 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 AM EAGLE 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 AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on Ping An and AM EAGLE 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 AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and AM EAGLE.
Diversification Opportunities for Ping An and AM EAGLE
Very weak diversification
The 3 months correlation between Ping and AFG is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS 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 AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of Ping An i.e., Ping An and AM EAGLE go up and down completely randomly.
Pair Corralation between Ping An and AM EAGLE
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.39 times more return on investment than AM EAGLE. However, Ping An is 1.39 times more volatile than AM EAGLE OUTFITTERS. It trades about 0.06 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about 0.03 per unit of risk. If you would invest 220.00 in Ping An Insurance on October 13, 2024 and sell it today you would earn a total of 290.00 from holding Ping An Insurance or generate 131.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| Ping An Insurance |
| AM EAGLE OUTFITTERS |
Ping An and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and AM EAGLE
The main advantage of trading using opposite Ping An and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, AM EAGLE 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| Ping An vs. Citic Telecom International | Ping An vs. CDN IMPERIAL BANK | Ping An vs. Highlight Communications AG | Ping An vs. Shenandoah Telecommunications |
| AM EAGLE vs. VULCAN MATERIALS | AM EAGLE vs. INDOFOOD AGRI RES | AM EAGLE vs. GWILLI FOOD | AM EAGLE vs. Heidelberg Materials AG |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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