Correlation Between Ping An and Amazon
Can any of the company-specific risk be diversified away by investing in both Ping An and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on Ping An and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Amazon.
Diversification Opportunities for Ping An and Amazon
Very weak diversification
The 3 months correlation between Ping and Amazon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Ping An i.e., Ping An and Amazon go up and down completely randomly.
Pair Corralation between Ping An and Amazon
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Amazon. In addition to that, Ping An is 1.44 times more volatile than Amazon Inc. It trades about -0.05 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.16 per unit of volatility. If you would invest 18,260 in Amazon Inc on September 2, 2024 and sell it today you would earn a total of 1,280 from holding Amazon Inc or generate 7.01% 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. Amazon Inc
Performance |
| Timeline |
| Ping An Insurance |
| Amazon Inc |
Ping An and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Amazon
The main advantage of trading using opposite Ping An and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Ping An vs. SIVERS SEMICONDUCTORS AB | Ping An vs. Darden Restaurants | Ping An vs. Reliance Steel Aluminum | Ping An vs. Q2M Managementberatung AG |
| Amazon vs. Richardson Electronics | Amazon vs. Mobilezone Holding AG | Amazon vs. METHODE ELECTRONICS | Amazon vs. Arrow Electronics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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