Correlation Between CICC Fund and Ping An

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

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

Diversification Opportunities for CICC Fund and Ping An

-0.75

Correlation Coefficient

CICC Fund  Ping An

Pay attention - limited upside

The 3 months correlation between CICC and Ping is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CICC Fund Management 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 CICC Fund 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 CICC Fund Management 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 CICC Fund i.e., CICC Fund and Ping An go up and down completely randomly.

Pair Corralation between CICC Fund and Ping An

Assuming the 90 days trading horizon CICC Fund Management is expected to generate 0.34 times more return on investment than Ping An. However, CICC Fund Management is 2.96 times less risky than Ping An. It trades about 0.38 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.09 per unit of risk. If you would invest  311.00  in CICC Fund Management on September 4, 2024 and sell it today you would earn a total of  19.00  from holding CICC Fund Management or generate 6.11% return on investment over 90 days.

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

CICC Fund Management  vs.  Ping An Insurance

CICC Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ping An Insurance

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with CICC Fund and Ping An

The main advantage of trading using opposite CICC Fund and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CICC Fund 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 CICC Fund Management 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.