Correlation Between LEGACY IRON and Ping An

Can any of the company-specific risk be diversified away by investing in both LEGACY IRON and Ping An 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 LEGACY IRON and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LEGACY IRON ORE and Ping An Insurance, you can compare the effects of market volatilities on LEGACY IRON and Ping An 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 LEGACY IRON with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEGACY IRON and Ping An.

Diversification Opportunities for LEGACY IRON and Ping An

0.0

Correlation Coefficient

LEGACY IRON  Ping An

Pay attention - limited upside

The 3 months correlation between LEGACY and Ping is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LEGACY IRON ORE and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance and LEGACY IRON 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 LEGACY IRON ORE are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of LEGACY IRON i.e., LEGACY IRON and Ping An go up and down completely randomly.

Pair Corralation between LEGACY IRON and Ping An

If you would invest  568.00  in Ping An Insurance on December 23, 2024 and sell it today you would earn a total of  12.00  from holding Ping An Insurance or generate 2.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

LEGACY IRON ORE  vs.  Ping An Insurance

LEGACY IRON ORE

Risk-Adjusted Performance

Very Weak

Over the last 90 days LEGACY IRON ORE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, LEGACY IRON is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ping An Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ping An is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LEGACY IRON and Ping An

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

The idea behind LEGACY IRON ORE and Ping An Insurance 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.