Correlation Between Ping An and Kuehne +

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

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

Diversification Opportunities for Ping An and Kuehne +

0.31

Correlation Coefficient

Ping An  Kuehne +

Weak diversification

The 3 months correlation between Ping and Kuehne is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna and Ping An 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 Ping An Insurance are associated (or correlated) with Kuehne +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of Ping An i.e., Ping An and Kuehne + go up and down completely randomly.

Pair Corralation between Ping An and Kuehne +

Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Kuehne +. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.11 times less risky than Kuehne +. The stock trades about 0.0 of its potential returns per unit of risk. The Kuehne Nagel International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,200  in Kuehne Nagel International on December 29, 2024 and sell it today you would earn a total of  20.00  from holding Kuehne Nagel International or generate 0.48% return on investment over 90 days.

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

Ping An Insurance  vs.  Kuehne Nagel International

Ping An Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ping An Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ping An is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kuehne Nagel Interna

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kuehne Nagel International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Kuehne + is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ping An and Kuehne +

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

The idea behind Ping An Insurance and Kuehne Nagel International 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.