Correlation Between Volkswagen and Ping An
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Ping An 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 Volkswagen and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Ping An Insurance, you can compare the effects of market volatilities on Volkswagen and Ping An 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 Volkswagen with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Ping An.
Diversification Opportunities for Volkswagen and Ping An
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Volkswagen and Ping is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance and Volkswagen 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 Volkswagen AG are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Volkswagen i.e., Volkswagen and Ping An go up and down completely randomly.
Pair Corralation between Volkswagen and Ping An
Assuming the 90 days trading horizon Volkswagen AG is expected to under-perform the Ping An. But the stock apears to be less risky and, when comparing its historical volatility, Volkswagen AG is 1.75 times less risky than Ping An. The stock trades about -0.15 of its potential returns per unit of risk. The Ping An Insurance is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 599.00 in Ping An Insurance on September 12, 2024 and sell it today you would lose (9.00) from holding Ping An Insurance or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Ping An Insurance
Performance |
| Timeline |
| Volkswagen AG |
| Ping An Insurance |
Volkswagen and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Ping An
The main advantage of trading using opposite Volkswagen and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Volkswagen vs. Fukuyama Transporting Co | Volkswagen vs. PT Global Mediacom | Volkswagen vs. PLAYTIKA HOLDING DL 01 | Volkswagen vs. Prosiebensat 1 Media |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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