Correlation Between Ping An and United Airlines
Can any of the company-specific risk be diversified away by investing in both Ping An and United Airlines 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 United Airlines 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 United Airlines Holdings, you can compare the effects of market volatilities on Ping An and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and United Airlines.
Diversification Opportunities for Ping An and United Airlines
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ping and United is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Ping An i.e., Ping An and United Airlines go up and down completely randomly.
Pair Corralation between Ping An and United Airlines
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.58 times more return on investment than United Airlines. However, Ping An Insurance is 1.73 times less risky than United Airlines. It trades about 0.0 of its potential returns per unit of risk. United Airlines Holdings is currently generating about -0.09 per unit of risk. If you would invest 568.00 in Ping An Insurance on December 28, 2024 and sell it today you would lose (7.00) from holding Ping An Insurance or give up 1.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ping An Insurance vs. United Airlines Holdings
Performance |
Timeline |
Ping An Insurance |
United Airlines Holdings |
Ping An and United Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ping An and United Airlines
The main advantage of trading using opposite Ping An and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.Ping An vs. TRAVEL LEISURE DL 01 | Ping An vs. Columbia Sportswear | Ping An vs. Ming Le Sports | Ping An vs. PLAYTECH |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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