Correlation Between Ping An and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Ping An and Zurich 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 Zurich 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 Zurich Insurance Group, you can compare the effects of market volatilities on Ping An and Zurich 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Zurich Insurance.
Diversification Opportunities for Ping An and Zurich Insurance
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ping and Zurich is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of Ping An i.e., Ping An and Zurich Insurance go up and down completely randomly.
Pair Corralation between Ping An and Zurich Insurance
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 2.51 times more return on investment than Zurich Insurance. However, Ping An is 2.51 times more volatile than Zurich Insurance Group. It trades about 0.08 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.08 per unit of risk. If you would invest 254.00 in Ping An Insurance on September 1, 2024 and sell it today you would earn a total of 286.00 from holding Ping An Insurance or generate 112.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Zurich Insurance Group
Performance |
| Timeline |
| Ping An Insurance |
| Zurich Insurance |
Ping An and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Zurich Insurance
The main advantage of trading using opposite Ping An and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Zurich 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 Zurich Insurance will offset losses from the drop in Zurich Insurance'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 |
| Zurich Insurance vs. Ribbon Communications | Zurich Insurance vs. Rogers Communications | Zurich Insurance vs. Cogent Communications Holdings | Zurich Insurance vs. Autohome ADR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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