Correlation Between Ping An and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Ping An and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on Ping An and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Universal Entertainment.
Diversification Opportunities for Ping An and Universal Entertainment
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and Universal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Ping An i.e., Ping An and Universal Entertainment go up and down completely randomly.
Pair Corralation between Ping An and Universal Entertainment
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.46 times more return on investment than Universal Entertainment. However, Ping An is 1.46 times more volatile than Universal Entertainment. It trades about 0.07 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.06 per unit of risk. If you would invest 187.00 in Ping An Insurance on September 3, 2024 and sell it today you would earn a total of 353.00 from holding Ping An Insurance or generate 188.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Universal Entertainment
Performance |
| Timeline |
| Ping An Insurance |
| Universal Entertainment |
Ping An and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Universal Entertainment
The main advantage of trading using opposite Ping An and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| Ping An vs. LION ONE METALS | Ping An vs. IDP EDUCATION LTD | Ping An vs. DEVRY EDUCATION GRP | Ping An vs. Perseus Mining Limited |
| Universal Entertainment vs. TOTAL GABON | Universal Entertainment vs. Walgreens Boots Alliance | Universal Entertainment vs. Peak Resources Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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