Correlation Between Ping An and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Ping An and Applied Materials 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 Applied Materials 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 Applied Materials, you can compare the effects of market volatilities on Ping An and Applied Materials 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 Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Applied Materials.
Diversification Opportunities for Ping An and Applied Materials
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ping and Applied is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials 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 Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of Ping An i.e., Ping An and Applied Materials go up and down completely randomly.
Pair Corralation between Ping An and Applied Materials
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.52 times more return on investment than Applied Materials. However, Ping An is 1.52 times more volatile than Applied Materials. It trades about 0.08 of its potential returns per unit of risk. Applied Materials is currently generating about 0.04 per unit of risk. If you would invest 254.00 in Ping An Insurance on November 28, 2024 and sell it today you would earn a total of 316.00 from holding Ping An Insurance or generate 124.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Ping An Insurance vs. Applied Materials
Performance |
| Timeline |
| Ping An Insurance |
| Applied Materials |
Ping An and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Applied Materials
The main advantage of trading using opposite Ping An and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Applied Materials 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 Applied Materials will offset losses from the drop in Applied Materials' long position.| Ping An vs. Nordic Semiconductor ASA | Ping An vs. Hua Hong Semiconductor | Ping An vs. Chalice Mining Limited | Ping An vs. Elmos Semiconductor SE |
| Applied Materials vs. Moneysupermarket Group PLC | Applied Materials vs. MagnaChip Semiconductor Corp | Applied Materials vs. CanSino Biologics | Applied Materials vs. High Liner Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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