Correlation Between Healthequity and Ping An

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Can any of the company-specific risk be diversified away by investing in both Healthequity 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 Healthequity and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthequity and Ping An Healthcare, you can compare the effects of market volatilities on Healthequity 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 Healthequity with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthequity and Ping An.

Diversification Opportunities for Healthequity and Ping An

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Healthequity and Ping is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Healthequity and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare and Healthequity 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 Healthequity 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 Healthcare has no effect on the direction of Healthequity i.e., Healthequity and Ping An go up and down completely randomly.

Pair Corralation between Healthequity and Ping An

Assuming the 90 days horizon Healthequity is expected to generate 0.13 times more return on investment than Ping An. However, Healthequity is 7.57 times less risky than Ping An. It trades about -0.23 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.19 per unit of risk. If you would invest  9,900  in Healthequity on September 24, 2024 and sell it today you would lose (850.00) from holding Healthequity or give up 8.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Healthequity  vs.  Ping An Healthcare

 Performance 
       Timeline  
Healthequity 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Healthequity reported solid returns over the last few months and may actually be approaching a breakup point.
Ping An Healthcare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Healthequity and Ping An Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Healthequity and Ping An

The main advantage of trading using opposite Healthequity and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthequity 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 Healthequity and Ping An Healthcare 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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