Correlation Between PING AN and CHINA PACINGRGDR5
Can any of the company-specific risk be diversified away by investing in both PING AN and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PING AN INSURANCH and CHINA PACINGRGDR5 YC1, you can compare the effects of market volatilities on PING AN and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of PING AN and CHINA PACINGRGDR5.
Diversification Opportunities for PING AN and CHINA PACINGRGDR5
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PING and CHINA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PING AN INSURANCH and CHINA PACINGRGDR5 YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA PACINGRGDR5 YC1 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 INSURANCH are associated (or correlated) with CHINA PACINGRGDR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA PACINGRGDR5 YC1 has no effect on the direction of PING AN i.e., PING AN and CHINA PACINGRGDR5 go up and down completely randomly.
Pair Corralation between PING AN and CHINA PACINGRGDR5
Assuming the 90 days trading horizon PING AN INSURANCH is expected to under-perform the CHINA PACINGRGDR5. But the stock apears to be less risky and, when comparing its historical volatility, PING AN INSURANCH is 1.07 times less risky than CHINA PACINGRGDR5. The stock trades about -0.29 of its potential returns per unit of risk. The CHINA PACINGRGDR5 YC1 is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 2,160 in CHINA PACINGRGDR5 YC1 on October 25, 2024 and sell it today you would lose (140.00) from holding CHINA PACINGRGDR5 YC1 or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PING AN INSURANCH vs. CHINA PACINGRGDR5 YC1
Performance |
| Timeline |
| PING AN INSURANCH |
| CHINA PACINGRGDR5 YC1 |
PING AN and CHINA PACINGRGDR5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PING AN and CHINA PACINGRGDR5
The main advantage of trading using opposite PING AN and CHINA PACINGRGDR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PING AN position performs unexpectedly, CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 will offset losses from the drop in CHINA PACINGRGDR5's long position.| PING AN vs. JSC Halyk bank | PING AN vs. T MOBILE US | PING AN vs. Erste Group Bank | PING AN vs. Ameriprise Financial |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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