Correlation Between Ping An and Gohigh Data

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

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

Diversification Opportunities for Ping An and Gohigh Data

-0.34

Correlation Coefficient

Ping An  Gohigh Data

Very good diversification

The 3 months correlation between Ping and Gohigh is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Gohigh Data Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gohigh Data Networks 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 Insurance are associated (or correlated) with Gohigh Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gohigh Data Networks has no effect on the direction of Ping An i.e., Ping An and Gohigh Data go up and down completely randomly.

Pair Corralation between Ping An and Gohigh Data

Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Gohigh Data. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.56 times less risky than Gohigh Data. The stock trades about -0.14 of its potential returns per unit of risk. The Gohigh Data Networks is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  279.00  in Gohigh Data Networks on October 7, 2024 and sell it today you would earn a total of  38.00  from holding Gohigh Data Networks or generate 13.62% return on investment over 90 days.

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

Ping An Insurance  vs.  Gohigh Data Networks

Ping An Insurance

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Gohigh Data Networks

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Ping An and Gohigh Data

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

The idea behind Ping An Insurance and Gohigh Data Networks 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.