Correlation Between Ping An and Hangzhou Gisway

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

Diversification Opportunities for Ping An and Hangzhou Gisway

0.64

Correlation Coefficient

Ping An  Hangzhou Gisway

Poor diversification

The 3 months correlation between Ping and Hangzhou is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Hangzhou Gisway Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gisway Info 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 Hangzhou Gisway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gisway Info has no effect on the direction of Ping An i.e., Ping An and Hangzhou Gisway go up and down completely randomly.

Pair Corralation between Ping An and Hangzhou Gisway

Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Hangzhou Gisway. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.92 times less risky than Hangzhou Gisway. The stock trades about -0.03 of its potential returns per unit of risk. The Hangzhou Gisway Information is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,614  in Hangzhou Gisway Information on December 26, 2024 and sell it today you would earn a total of  209.00  from holding Hangzhou Gisway Information or generate 5.78% 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.  Hangzhou Gisway Information

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.

Hangzhou Gisway Info

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Ping An and Hangzhou Gisway

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

The idea behind Ping An Insurance and Hangzhou Gisway Information 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.