Correlation Between Ping An and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Ping An and SBI 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 SBI 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 SBI Insurance Group, you can compare the effects of market volatilities on Ping An and SBI 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and SBI Insurance.
Diversification Opportunities for Ping An and SBI Insurance
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and SBI is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Ping An i.e., Ping An and SBI Insurance go up and down completely randomly.
Pair Corralation between Ping An and SBI Insurance
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the SBI Insurance. In addition to that, Ping An is 2.17 times more volatile than SBI Insurance Group. It trades about -0.03 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.23 per unit of volatility. If you would invest 565.00 in SBI Insurance Group on August 31, 2024 and sell it today you would earn a total of 40.00 from holding SBI Insurance Group or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ping An Insurance vs. SBI Insurance Group
Performance |
| Timeline |
| Ping An Insurance |
| SBI Insurance Group |
Ping An and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and SBI Insurance
The main advantage of trading using opposite Ping An and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, SBI 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| Ping An vs. Southwest Airlines Co | Ping An vs. Selective Insurance Group | Ping An vs. MOVIE GAMES SA | Ping An vs. Reinsurance Group of |
| SBI Insurance vs. SALESFORCE INC CDR | SBI Insurance vs. Lamar Advertising | SBI Insurance vs. UET United Electronic | SBI Insurance vs. Electronic Arts |
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 Stocks Directory module to find actively traded stocks across global markets.
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