Correlation Between Ping An and MSAD INSURANCE
Can any of the company-specific risk be diversified away by investing in both Ping An and MSAD INSURANCE 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 MSAD INSURANCE 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 MSAD INSURANCE, you can compare the effects of market volatilities on Ping An and MSAD INSURANCE 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 MSAD INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and MSAD INSURANCE.
Diversification Opportunities for Ping An and MSAD INSURANCE
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ping and MSAD is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and MSAD INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD INSURANCE 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 MSAD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD INSURANCE has no effect on the direction of Ping An i.e., Ping An and MSAD INSURANCE go up and down completely randomly.
Pair Corralation between Ping An and MSAD INSURANCE
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 2.1 times more return on investment than MSAD INSURANCE. However, Ping An is 2.1 times more volatile than MSAD INSURANCE. It trades about 0.0 of its potential returns per unit of risk. MSAD INSURANCE is currently generating about -0.13 per unit of risk. If you would invest 568.00 in Ping An Insurance on December 2, 2024 and sell it today you would lose (8.00) from holding Ping An Insurance or give up 1.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ping An Insurance vs. MSAD INSURANCE
Performance |
Timeline |
Ping An Insurance |
MSAD INSURANCE |
Ping An and MSAD INSURANCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ping An and MSAD INSURANCE
The main advantage of trading using opposite Ping An and MSAD INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, MSAD INSURANCE 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 MSAD INSURANCE will offset losses from the drop in MSAD INSURANCE's long position.Ping An vs. MELIA HOTELS | Ping An vs. EITZEN CHEMICALS | Ping An vs. COVIVIO HOTELS INH | Ping An vs. MIRAMAR HOTEL INV |
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Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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