Correlation Between Unisplendour Corp and Ping An

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

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

Diversification Opportunities for Unisplendour Corp and Ping An

-0.12

Correlation Coefficient

Unisplendour Corp  Ping An

Good diversification

The 3 months correlation between Unisplendour and Ping is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Unisplendour Corp 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 Unisplendour Corp 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 Unisplendour Corp 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 Unisplendour Corp i.e., Unisplendour Corp and Ping An go up and down completely randomly.

Pair Corralation between Unisplendour Corp and Ping An

Assuming the 90 days trading horizon Unisplendour Corp is expected to generate 3.1 times more return on investment than Ping An. However, Unisplendour Corp is 3.1 times more volatile than Ping An Insurance. It trades about 0.11 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.01 per unit of risk. If you would invest  2,601  in Unisplendour Corp on December 3, 2024 and sell it today you would earn a total of  355.00  from holding Unisplendour Corp or generate 13.65% return on investment over 90 days.

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

Unisplendour Corp  vs.  Ping An Insurance

Unisplendour Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unisplendour Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Unisplendour Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Ping An Insurance

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Unisplendour Corp and Ping An

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

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.