Correlation Between Ping An and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Ping An and LIFENET 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 LIFENET 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 LIFENET INSURANCE CO, you can compare the effects of market volatilities on Ping An and LIFENET 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and LIFENET INSURANCE.
Diversification Opportunities for Ping An and LIFENET INSURANCE
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ping and LIFENET is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Ping An i.e., Ping An and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Ping An and LIFENET INSURANCE
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.3 times more return on investment than LIFENET INSURANCE. However, Ping An is 1.3 times more volatile than LIFENET INSURANCE CO. It trades about 0.02 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about -0.17 per unit of risk. If you would invest 557.00 in Ping An Insurance on December 1, 2024 and sell it today you would earn a total of 3.00 from holding Ping An Insurance or generate 0.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Ping An Insurance vs. LIFENET INSURANCE CO
Performance |
Timeline |
Ping An Insurance |
LIFENET INSURANCE |
Ping An and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ping An and LIFENET INSURANCE
The main advantage of trading using opposite Ping An and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, LIFENET 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.Ping An vs. Air Transport Services | Ping An vs. Sportsmans Warehouse Holdings | Ping An vs. FIREWEED METALS P | Ping An vs. AEON METALS LTD |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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