Correlation Between Ping An and ROPEOK Technology

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

Diversification Opportunities for Ping An and ROPEOK Technology

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Ping and ROPEOK is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology 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 ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of Ping An i.e., Ping An and ROPEOK Technology go up and down completely randomly.

Pair Corralation between Ping An and ROPEOK Technology

Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.42 times more return on investment than ROPEOK Technology. However, Ping An Insurance is 2.36 times less risky than ROPEOK Technology. It trades about -0.2 of its potential returns per unit of risk. ROPEOK Technology Group is currently generating about -0.19 per unit of risk. If you would invest  5,393  in Ping An Insurance on October 5, 2024 and sell it today you would lose (363.00) from holding Ping An Insurance or give up 6.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ping An Insurance  vs.  ROPEOK Technology Group

 Performance 
       Timeline  
Ping An Insurance 

Risk-Adjusted Performance

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Weak
 
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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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
ROPEOK Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ROPEOK Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ROPEOK Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ping An and ROPEOK Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ping An and ROPEOK Technology

The main advantage of trading using opposite Ping An and ROPEOK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, ROPEOK Technology 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 ROPEOK Technology will offset losses from the drop in ROPEOK Technology's long position.
The idea behind Ping An Insurance and ROPEOK Technology Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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