Correlation Between JS Corrugating and Ping An

Can any of the company-specific risk be diversified away by investing in both JS Corrugating 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 JS Corrugating and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JS Corrugating Machinery and Ping An Insurance, you can compare the effects of market volatilities on JS Corrugating 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 JS Corrugating with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Corrugating and Ping An.

Diversification Opportunities for JS Corrugating and Ping An

0.52

Correlation Coefficient

JS Corrugating  Ping An

Very weak diversification

The 3 months correlation between 000821 and Ping is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding JS Corrugating Machinery 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 JS Corrugating 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 JS Corrugating Machinery 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 JS Corrugating i.e., JS Corrugating and Ping An go up and down completely randomly.

Pair Corralation between JS Corrugating and Ping An

Assuming the 90 days trading horizon JS Corrugating Machinery is expected to under-perform the Ping An. In addition to that, JS Corrugating is 1.62 times more volatile than Ping An Insurance. It trades about -0.14 of its total potential returns per unit of risk. Ping An Insurance is currently generating about 0.0 per unit of volatility. If you would invest  5,355  in Ping An Insurance on September 28, 2024 and sell it today you would lose (10.00) from holding Ping An Insurance or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

JS Corrugating Machinery  vs.  Ping An Insurance

JS Corrugating Machinery

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JS Corrugating Machinery are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Corrugating may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ping An Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ping An is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JS Corrugating and Ping An

The main advantage of trading using opposite JS Corrugating and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Corrugating 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.

The idea behind JS Corrugating Machinery and Ping An Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.