Correlation Between Ping An and STRAYER EDUCATION

Can any of the company-specific risk be diversified away by investing in both Ping An and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on Ping An and STRAYER EDUCATION 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 STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and STRAYER EDUCATION.

Diversification Opportunities for Ping An and STRAYER EDUCATION

-0.39

Correlation Coefficient

Ping An  STRAYER EDUCATION

Very good diversification

The 3 months correlation between Ping and STRAYER is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Ping An i.e., Ping An and STRAYER EDUCATION go up and down completely randomly.

Pair Corralation between Ping An and STRAYER EDUCATION

Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.82 times more return on investment than STRAYER EDUCATION. However, Ping An Insurance is 1.22 times less risky than STRAYER EDUCATION. It trades about 0.0 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about -0.05 per unit of risk. If you would invest  568.00  in Ping An Insurance on December 29, 2024 and sell it today you would lose (9.00) from holding Ping An Insurance or give up 1.58% of portfolio value over 90 days.

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

Ping An Insurance  vs.  STRAYER EDUCATION

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 comparatively stable basic indicators, Ping An is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

STRAYER EDUCATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days STRAYER EDUCATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Ping An and STRAYER EDUCATION

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

The idea behind Ping An Insurance and STRAYER EDUCATION 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.