Correlation Between AIR PRODCHEMICALS and Ping An

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

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

Diversification Opportunities for AIR PRODCHEMICALS and Ping An

-0.19

Correlation Coefficient

AIR PRODCHEMICALS  Ping An

Good diversification

The 3 months correlation between AIR and Ping is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 Healthcare has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Ping An go up and down completely randomly.

Pair Corralation between AIR PRODCHEMICALS and Ping An

Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the Ping An. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 3.19 times less risky than Ping An. The stock trades about -0.05 of its potential returns per unit of risk. The Ping An Healthcare is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  77.00  in Ping An Healthcare on December 19, 2024 and sell it today you would earn a total of  12.00  from holding Ping An Healthcare or generate 15.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AIR PRODCHEMICALS  vs.  Ping An Healthcare

AIR PRODCHEMICALS

Risk-Adjusted Performance

Very Weak

Over the last 90 days AIR PRODCHEMICALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AIR PRODCHEMICALS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ping An Healthcare

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Healthcare are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Ping An reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIR PRODCHEMICALS and Ping An

The main advantage of trading using opposite AIR PRODCHEMICALS and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Ping An Healthcare 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.