Correlation Between Ping An and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both Ping An and KENNAMETAL INC 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 KENNAMETAL INC 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 KENNAMETAL INC, you can compare the effects of market volatilities on Ping An and KENNAMETAL INC 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 KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and KENNAMETAL INC.
Diversification Opportunities for Ping An and KENNAMETAL INC
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ping and KENNAMETAL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC 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 KENNAMETAL INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENNAMETAL INC has no effect on the direction of Ping An i.e., Ping An and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between Ping An and KENNAMETAL INC
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 2.31 times more return on investment than KENNAMETAL INC. However, Ping An is 2.31 times more volatile than KENNAMETAL INC. It trades about 0.12 of its potential returns per unit of risk. KENNAMETAL INC is currently generating about 0.03 per unit of risk. If you would invest 198.00 in Ping An Insurance on September 12, 2024 and sell it today you would earn a total of 383.00 from holding Ping An Insurance or generate 193.43% 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. KENNAMETAL INC
Performance |
| Timeline |
| Ping An Insurance |
| KENNAMETAL INC |
Ping An and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and KENNAMETAL INC
The main advantage of trading using opposite Ping An and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, KENNAMETAL INC 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 KENNAMETAL INC will offset losses from the drop in KENNAMETAL INC's long position.| Ping An vs. Nippon Steel | Ping An vs. REVO INSURANCE SPA | Ping An vs. ALGOMA STEEL GROUP | Ping An vs. LEGACY IRON ORE |
| KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |