Correlation Between Ping An and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Ping An and Safety 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 Safety 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 Safety Insurance Group, you can compare the effects of market volatilities on Ping An and Safety 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Safety Insurance.
Diversification Opportunities for Ping An and Safety Insurance
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ping and Safety is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Ping An i.e., Ping An and Safety Insurance go up and down completely randomly.
Pair Corralation between Ping An and Safety Insurance
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 3.38 times more return on investment than Safety Insurance. However, Ping An is 3.38 times more volatile than Safety Insurance Group. It trades about 0.17 of its potential returns per unit of risk. Safety Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 335.00 in Ping An Insurance on August 30, 2024 and sell it today you would earn a total of 205.00 from holding Ping An Insurance or generate 61.19% 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. Safety Insurance Group
Performance |
| Timeline |
| Ping An Insurance |
| Safety Insurance |
Ping An and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Safety Insurance
The main advantage of trading using opposite Ping An and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Safety 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Ping An vs. Southwest Airlines Co | Ping An vs. Selective Insurance Group | Ping An vs. MOVIE GAMES SA | Ping An vs. Reinsurance Group of |
| Safety Insurance vs. Chuangs China Investments | Safety Insurance vs. UNIVERSAL MUSIC GROUP | Safety Insurance vs. Gladstone Investment | Safety Insurance vs. BURLINGTON STORES |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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