Correlation Between Ping An and Huadong Medicine
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By analyzing existing cross correlation between Ping An Insurance and Huadong Medicine Co, you can compare the effects of market volatilities on Ping An and Huadong Medicine 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 Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Huadong Medicine.
Diversification Opportunities for Ping An and Huadong Medicine
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ping and Huadong is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine 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 Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Ping An i.e., Ping An and Huadong Medicine go up and down completely randomly.
Pair Corralation between Ping An and Huadong Medicine
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.01 times more return on investment than Huadong Medicine. However, Ping An is 1.01 times more volatile than Huadong Medicine Co. It trades about 0.1 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about 0.09 per unit of risk. If you would invest 4,165 in Ping An Insurance on September 24, 2024 and sell it today you would earn a total of 1,097 from holding Ping An Insurance or generate 26.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ping An Insurance vs. Huadong Medicine Co
Performance |
Timeline |
Ping An Insurance |
Huadong Medicine |
Ping An and Huadong Medicine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ping An and Huadong Medicine
The main advantage of trading using opposite Ping An and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.Ping An vs. Kweichow Moutai Co | Ping An vs. Shenzhen Mindray Bio Medical | Ping An vs. Jiangsu Pacific Quartz | Ping An vs. G bits Network Technology |
Huadong Medicine vs. Industrial and Commercial | Huadong Medicine vs. Kweichow Moutai Co | Huadong Medicine vs. Agricultural Bank of | Huadong Medicine vs. China Mobile Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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