Correlation Between Ping An and OAKRIDGE INTERNATIONAL

Can any of the company-specific risk be diversified away by investing in both Ping An and OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL, you can compare the effects of market volatilities on Ping An and OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and OAKRIDGE INTERNATIONAL.

Diversification Opportunities for Ping An and OAKRIDGE INTERNATIONAL

0.17

Correlation Coefficient

Ping An  OAKRIDGE INTERNATIONAL

Average diversification

The 3 months correlation between Ping and OAKRIDGE is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Healthcare and OAKRIDGE INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKRIDGE INTERNATIONAL has no effect on the direction of Ping An i.e., Ping An and OAKRIDGE INTERNATIONAL go up and down completely randomly.

Pair Corralation between Ping An and OAKRIDGE INTERNATIONAL

Assuming the 90 days horizon Ping An Healthcare is expected to under-perform the OAKRIDGE INTERNATIONAL. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Healthcare is 3.12 times less risky than OAKRIDGE INTERNATIONAL. The stock trades about -0.03 of its potential returns per unit of risk. The OAKRIDGE INTERNATIONAL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5.30  in OAKRIDGE INTERNATIONAL on October 5, 2024 and sell it today you would lose (2.00) from holding OAKRIDGE INTERNATIONAL or give up 37.74% of portfolio value over 90 days.

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

Ping An Healthcare  vs.  OAKRIDGE INTERNATIONAL

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.

OAKRIDGE INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days OAKRIDGE INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, OAKRIDGE INTERNATIONAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ping An and OAKRIDGE INTERNATIONAL

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

The idea behind Ping An Healthcare and OAKRIDGE INTERNATIONAL 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.