Correlation Between Ping An and Huafa Industrial
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By analyzing existing cross correlation between Ping An Insurance and Huafa Industrial Co, you can compare the effects of market volatilities on Ping An and Huafa Industrial 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 Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Huafa Industrial.
Diversification Opportunities for Ping An and Huafa Industrial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ping and Huafa is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial 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 Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of Ping An i.e., Ping An and Huafa Industrial go up and down completely randomly.
Pair Corralation between Ping An and Huafa Industrial
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.75 times more return on investment than Huafa Industrial. However, Ping An Insurance is 1.34 times less risky than Huafa Industrial. It trades about -0.08 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.13 per unit of risk. If you would invest 5,490 in Ping An Insurance on December 11, 2024 and sell it today you would lose (340.00) from holding Ping An Insurance or give up 6.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ping An Insurance vs. Huafa Industrial Co
Performance |
Timeline |
Ping An Insurance |
Huafa Industrial |
Ping An and Huafa Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ping An and Huafa Industrial
The main advantage of trading using opposite Ping An and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Huafa Industrial 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.Ping An vs. Dazhong Transportation Group | Ping An vs. Guotai Epoint Software | Ping An vs. Inspur Software Co | Ping An vs. China Sports Industry |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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