Correlation Between Ping An and Teladoc

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

By analyzing existing cross correlation between Ping An Healthcare and Teladoc, you can compare the effects of market volatilities on Ping An and Teladoc 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 Teladoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Teladoc.

Diversification Opportunities for Ping An and Teladoc

-0.04

Correlation Coefficient

Ping An  Teladoc

Good diversification

The 3 months correlation between Ping and Teladoc is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Healthcare and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc 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 Healthcare are associated (or correlated) with Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of Ping An i.e., Ping An and Teladoc go up and down completely randomly.

Pair Corralation between Ping An and Teladoc

Assuming the 90 days horizon Ping An Healthcare is expected to under-perform the Teladoc. In addition to that, Ping An is 1.15 times more volatile than Teladoc. It trades about -0.03 of its total potential returns per unit of risk. Teladoc is currently generating about -0.03 per unit of volatility. If you would invest  2,457  in Teladoc on October 12, 2024 and sell it today you would lose (1,510) from holding Teladoc or give up 61.46% of portfolio value over 90 days.

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

Ping An Healthcare  vs.  Teladoc

Ping An Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Teladoc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Teladoc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ping An and Teladoc

The main advantage of trading using opposite Ping An and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Teladoc 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 Teladoc will offset losses from the drop in Teladoc's long position.

The idea behind Ping An Healthcare and Teladoc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.