Correlation Between Ping An and Dominion Energy
Can any of the company-specific risk be diversified away by investing in both Ping An and Dominion Energy 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 Dominion Energy 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 Dominion Energy, you can compare the effects of market volatilities on Ping An and Dominion Energy 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 Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Dominion Energy.
Diversification Opportunities for Ping An and Dominion Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ping and Dominion is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy 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 Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of Ping An i.e., Ping An and Dominion Energy go up and down completely randomly.
Pair Corralation between Ping An and Dominion Energy
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 3.99 times more return on investment than Dominion Energy. However, Ping An is 3.99 times more volatile than Dominion Energy. It trades about 0.14 of its potential returns per unit of risk. Dominion Energy is currently generating about 0.09 per unit of risk. If you would invest 244.00 in Ping An Insurance on September 3, 2024 and sell it today you would earn a total of 296.00 from holding Ping An Insurance or generate 121.31% 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. Dominion Energy
Performance |
| Timeline |
| Ping An Insurance |
| Dominion Energy |
Ping An and Dominion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Dominion Energy
The main advantage of trading using opposite Ping An and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Dominion Energy 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.| Ping An vs. LION ONE METALS | Ping An vs. IDP EDUCATION LTD | Ping An vs. DEVRY EDUCATION GRP | Ping An vs. Perseus Mining Limited |
| Dominion Energy vs. Choice Hotels International | Dominion Energy vs. Ping An Insurance | Dominion Energy vs. MELIA HOTELS | Dominion Energy vs. Dalata Hotel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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