Correlation Between Ping An and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both Ping An and REVO 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 REVO 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 REVO INSURANCE SPA, you can compare the effects of market volatilities on Ping An and REVO 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 REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and REVO INSURANCE.
Diversification Opportunities for Ping An and REVO INSURANCE
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ping and REVO is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of Ping An i.e., Ping An and REVO INSURANCE go up and down completely randomly.
Pair Corralation between Ping An and REVO INSURANCE
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the REVO INSURANCE. In addition to that, Ping An is 2.14 times more volatile than REVO INSURANCE SPA. It trades about -0.05 of its total potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.29 per unit of volatility. If you would invest 992.00 in REVO INSURANCE SPA on September 1, 2024 and sell it today you would earn a total of 88.00 from holding REVO INSURANCE SPA or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. REVO INSURANCE SPA
Performance |
| Timeline |
| Ping An Insurance |
| REVO INSURANCE SPA |
Ping An and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and REVO INSURANCE
The main advantage of trading using opposite Ping An and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, REVO 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| Ping An vs. Meiko Electronics Co | Ping An vs. North American Construction | Ping An vs. Sterling Construction | Ping An vs. UET United Electronic |
| REVO INSURANCE vs. The Travelers Companies | REVO INSURANCE vs. Allianz SE | REVO INSURANCE vs. Onxeo SA | REVO INSURANCE vs. Blue Sky Uranium |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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