Correlation Between Genworth Financial and Ping An

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

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

Diversification Opportunities for Genworth Financial and Ping An

-0.01

Correlation Coefficient

Genworth Financial  Ping An

Good diversification

The 3 months correlation between Genworth and Ping is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial 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 Genworth Financial 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 Genworth Financial 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 Genworth Financial i.e., Genworth Financial and Ping An go up and down completely randomly.

Pair Corralation between Genworth Financial and Ping An

Considering the 90-day investment horizon Genworth Financial is expected to under-perform the Ping An. But the stock apears to be less risky and, when comparing its historical volatility, Genworth Financial is 2.77 times less risky than Ping An. The stock trades about -0.02 of its potential returns per unit of risk. The Ping An Insurance is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,190  in Ping An Insurance on September 18, 2024 and sell it today you would lose (7.00) from holding Ping An Insurance or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Genworth Financial  vs.  Ping An Insurance

Genworth Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genworth Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Genworth Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ping An Insurance

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Ping An showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genworth Financial and Ping An

The main advantage of trading using opposite Genworth Financial and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial 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 Genworth Financial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.