Correlation Between Ping An and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Ping An and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Ping An and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Jacquet Metal.
Diversification Opportunities for Ping An and Jacquet Metal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ping and Jacquet is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Ping An i.e., Ping An and Jacquet Metal go up and down completely randomly.
Pair Corralation between Ping An and Jacquet Metal
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Jacquet Metal. In addition to that, Ping An is 2.08 times more volatile than Jacquet Metal Service. It trades about -0.05 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.03 per unit of volatility. If you would invest 1,580 in Jacquet Metal Service on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Jacquet Metal Service or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Jacquet Metal Service
Performance |
| Timeline |
| Ping An Insurance |
| Jacquet Metal Service |
Ping An and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Jacquet Metal
The main advantage of trading using opposite Ping An and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Ping An vs. SIVERS SEMICONDUCTORS AB | Ping An vs. Darden Restaurants | Ping An vs. Reliance Steel Aluminum | Ping An vs. Q2M Managementberatung AG |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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