Correlation Between CeoTronics and Ping An

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

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

Diversification Opportunities for CeoTronics and Ping An

0.47

Correlation Coefficient

CeoTronics  Ping An

Very weak diversification

The 3 months correlation between CeoTronics and Ping is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG 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 CeoTronics 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 CeoTronics AG 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 CeoTronics i.e., CeoTronics and Ping An go up and down completely randomly.

Pair Corralation between CeoTronics and Ping An

Assuming the 90 days trading horizon CeoTronics AG is expected to generate 1.0 times more return on investment than Ping An. However, CeoTronics AG is 1.0 times less risky than Ping An. It trades about 0.2 of its potential returns per unit of risk. Ping An Healthcare is currently generating about 0.04 per unit of risk. If you would invest  590.00  in CeoTronics AG on December 23, 2024 and sell it today you would earn a total of  400.00  from holding CeoTronics AG or generate 67.8% return on investment over 90 days.

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

CeoTronics AG  vs.  Ping An Healthcare

CeoTronics AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CeoTronics AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, CeoTronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ping An Healthcare

Risk-Adjusted Performance

Insignificant

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

Pair Trading with CeoTronics and Ping An

The main advantage of trading using opposite CeoTronics and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics 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 CeoTronics AG 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.