Correlation Between Ping An and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both Ping An and Reinsurance Group 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 Reinsurance Group 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 Reinsurance Group of, you can compare the effects of market volatilities on Ping An and Reinsurance Group 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 Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Reinsurance Group.
Diversification Opportunities for Ping An and Reinsurance Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ping and Reinsurance is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance 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 Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of Ping An i.e., Ping An and Reinsurance Group go up and down completely randomly.
Pair Corralation between Ping An and Reinsurance Group
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Reinsurance Group. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.04 times less risky than Reinsurance Group. The stock trades about -0.05 of its potential returns per unit of risk. The Reinsurance Group of is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 19,614 in Reinsurance Group of on September 1, 2024 and sell it today you would earn a total of 1,986 from holding Reinsurance Group of or generate 10.13% 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. Reinsurance Group of
Performance |
| Timeline |
| Ping An Insurance |
| Reinsurance Group |
Ping An and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Reinsurance Group
The main advantage of trading using opposite Ping An and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group'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 |
| Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. Origin Agritech | Reinsurance Group vs. Identiv | Reinsurance Group vs. INTUITIVE SURGICAL |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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