Correlation Between Ping An and Queclink Wireless

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

Diversification Opportunities for Ping An and Queclink Wireless

0.96

Correlation Coefficient

Ping An  Queclink Wireless

Almost no diversification

The 3 months correlation between Ping and Queclink is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Queclink Wireless Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queclink Wireless 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 Queclink Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queclink Wireless has no effect on the direction of Ping An i.e., Ping An and Queclink Wireless go up and down completely randomly.

Pair Corralation between Ping An and Queclink Wireless

Assuming the 90 days trading horizon Ping An is expected to generate 1.85 times less return on investment than Queclink Wireless. But when comparing it to its historical volatility, Ping An Insurance is 1.94 times less risky than Queclink Wireless. It trades about 0.14 of its potential returns per unit of risk. Queclink Wireless Solutions is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,037  in Queclink Wireless Solutions on September 3, 2024 and sell it today you would earn a total of  421.00  from holding Queclink Wireless Solutions or generate 40.6% return on investment over 90 days.

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

Ping An Insurance  vs.  Queclink Wireless Solutions

Ping An Insurance

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 10 (%) 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.

Queclink Wireless

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Queclink Wireless Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Queclink Wireless sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ping An and Queclink Wireless

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

The idea behind Ping An Insurance and Queclink Wireless Solutions 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.