Correlation Between ITALIAN WINE and Ping An

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

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

Diversification Opportunities for ITALIAN WINE and Ping An

-0.33

Correlation Coefficient

ITALIAN WINE  Ping An

Very good diversification

The 3 months correlation between ITALIAN and Ping is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS 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 ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Ping An go up and down completely randomly.

Pair Corralation between ITALIAN WINE and Ping An

Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to generate 0.13 times more return on investment than Ping An. However, ITALIAN WINE BRANDS is 7.75 times less risky than Ping An. It trades about 0.22 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.2 per unit of risk. If you would invest  2,240  in ITALIAN WINE BRANDS on October 2, 2024 and sell it today you would earn a total of  160.00  from holding ITALIAN WINE BRANDS or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

ITALIAN WINE BRANDS  vs.  Ping An Healthcare

ITALIAN WINE BRANDS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ITALIAN WINE BRANDS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ITALIAN WINE reported solid returns over the last few months and may actually be approaching a breakup point.

Ping An Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ITALIAN WINE and Ping An

The main advantage of trading using opposite ITALIAN WINE and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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 ITALIAN WINE BRANDS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.