Correlation Between Ping An and Winner Medical Co

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

Diversification Opportunities for Ping An and Winner Medical Co

-0.22

Correlation Coefficient

Ping An  Winner Medical Co

Very good diversification

The 3 months correlation between Ping and Winner is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Winner Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Medical Co 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 Winner Medical Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Medical Co has no effect on the direction of Ping An i.e., Ping An and Winner Medical Co go up and down completely randomly.

Pair Corralation between Ping An and Winner Medical Co

Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Winner Medical Co. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 2.14 times less risky than Winner Medical Co. The stock trades about -0.03 of its potential returns per unit of risk. The Winner Medical Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,497  in Winner Medical Co on November 29, 2024 and sell it today you would earn a total of  149.00  from holding Winner Medical Co or generate 4.26% 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.  Winner Medical Co

Ping An Insurance

Risk-Adjusted Performance

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 somewhat strong basic indicators, Ping An is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Winner Medical Co

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Winner Medical Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winner Medical Co may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Ping An and Winner Medical Co

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

The idea behind Ping An Insurance and Winner Medical Co 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.