Correlation Between CHINA HUARONG and Ping An
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and Ping An Insurance, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and Ping An.
Diversification Opportunities for CHINA HUARONG and Ping An
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CHINA and Ping is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and Ping An go up and down completely randomly.
Pair Corralation between CHINA HUARONG and Ping An
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to under-perform the Ping An. In addition to that, CHINA HUARONG is 7.41 times more volatile than Ping An Insurance. It trades about -0.03 of its total potential returns per unit of risk. Ping An Insurance is currently generating about 0.14 per unit of volatility. If you would invest 550.00 in Ping An Insurance on September 13, 2024 and sell it today you would earn a total of 32.00 from holding Ping An Insurance or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. Ping An Insurance
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| Ping An Insurance |
CHINA HUARONG and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and Ping An
The main advantage of trading using opposite CHINA HUARONG and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.| CHINA HUARONG vs. WILLIS LEASE FIN | CHINA HUARONG vs. SAFETY MEDICAL PROD | CHINA HUARONG vs. AVITA Medical | CHINA HUARONG vs. CarsalesCom |
| Ping An vs. FORWARD AIR P | Ping An vs. ARROW ELECTRONICS | Ping An vs. SIEM OFFSHORE NEW | Ping An vs. AOI Electronics Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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