Correlation Between Ping An and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Ping An and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Ping An and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Compagnie Plastic.
Diversification Opportunities for Ping An and Compagnie Plastic
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ping and Compagnie is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Ping An i.e., Ping An and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Ping An and Compagnie Plastic
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.26 times more return on investment than Compagnie Plastic. However, Ping An is 1.26 times more volatile than Compagnie Plastic Omnium. It trades about -0.07 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.25 per unit of risk. If you would invest 573.00 in Ping An Insurance on August 30, 2024 and sell it today you would lose (33.00) from holding Ping An Insurance or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Ping An Insurance |
| Compagnie Plastic Omnium |
Ping An and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Compagnie Plastic
The main advantage of trading using opposite Ping An and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Ping An vs. Apple Inc | Ping An vs. Apple Inc | Ping An vs. Superior Plus Corp | Ping An vs. SIVERS SEMICONDUCTORS AB |
| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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