Correlation Between Huize Holding and Aon PLC

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

By analyzing existing cross correlation between Huize Holding and Aon PLC, you can compare the effects of market volatilities on Huize Holding and Aon PLC 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 Huize Holding with a short position of Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huize Holding and Aon PLC.

Diversification Opportunities for Huize Holding and Aon PLC

0.17

Correlation Coefficient

Huize Holding  Aon PLC

Average diversification

The 3 months correlation between Huize and Aon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Huize Holding and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC and Huize Holding 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 Huize Holding are associated (or correlated) with Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of Huize Holding i.e., Huize Holding and Aon PLC go up and down completely randomly.

Pair Corralation between Huize Holding and Aon PLC

Given the investment horizon of 90 days Huize Holding is expected to under-perform the Aon PLC. In addition to that, Huize Holding is 4.35 times more volatile than Aon PLC. It trades about -0.04 of its total potential returns per unit of risk. Aon PLC is currently generating about 0.2 per unit of volatility. If you would invest  35,732  in Aon PLC on December 28, 2024 and sell it today you would earn a total of  4,222  from holding Aon PLC or generate 11.82% return on investment over 90 days.

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

Huize Holding  vs.  Aon PLC

Huize Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Huize Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Aon PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aon PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Aon PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Huize Holding and Aon PLC

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

The idea behind Huize Holding and Aon PLC 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 Global Correlations module to find global opportunities by holding instruments from different markets.