Correlation Between Ping An and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Ping An and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement SA, you can compare the effects of market volatilities on Ping An and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Veolia Environnement.
Diversification Opportunities for Ping An and Veolia Environnement
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ping and Veolia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Ping An i.e., Ping An and Veolia Environnement go up and down completely randomly.
Pair Corralation between Ping An and Veolia Environnement
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.81 times more return on investment than Veolia Environnement. However, Ping An is 1.81 times more volatile than Veolia Environnement SA. It trades about -0.03 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about -0.16 per unit of risk. If you would invest 557.00 in Ping An Insurance on August 31, 2024 and sell it today you would lose (17.00) from holding Ping An Insurance or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ping An Insurance vs. Veolia Environnement SA
Performance |
| Timeline |
| Ping An Insurance |
| Veolia Environnement |
Ping An and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Veolia Environnement
The main advantage of trading using opposite Ping An and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement'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 |
| Veolia Environnement vs. Veolia Environnement SA | Veolia Environnement vs. GFL ENVIRONM | Veolia Environnement vs. Superior Plus Corp | Veolia Environnement vs. NMI Holdings |
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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