Correlation Between LEONS FURNITURE and PING AN

Can any of the company-specific risk be diversified away by investing in both LEONS FURNITURE and PING AN 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 LEONS FURNITURE and PING AN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LEONS FURNITURE and PING AN INSURANCH, you can compare the effects of market volatilities on LEONS FURNITURE and PING AN 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 LEONS FURNITURE with a short position of PING AN. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEONS FURNITURE and PING AN.

Diversification Opportunities for LEONS FURNITURE and PING AN

0.59

Correlation Coefficient

LEONS FURNITURE  PING AN

Very weak diversification

The 3 months correlation between LEONS and PING is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding LEONS FURNITURE and PING AN INSURANCH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PING AN INSURANCH and LEONS FURNITURE 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 LEONS FURNITURE are associated (or correlated) with PING AN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PING AN INSURANCH has no effect on the direction of LEONS FURNITURE i.e., LEONS FURNITURE and PING AN go up and down completely randomly.

Pair Corralation between LEONS FURNITURE and PING AN

Assuming the 90 days horizon LEONS FURNITURE is expected to generate 0.86 times more return on investment than PING AN. However, LEONS FURNITURE is 1.17 times less risky than PING AN. It trades about 0.16 of its potential returns per unit of risk. PING AN INSURANCH is currently generating about 0.12 per unit of risk. If you would invest  1,400  in LEONS FURNITURE on April 24, 2025 and sell it today you would earn a total of  280.00  from holding LEONS FURNITURE or generate 20.0% return on investment over 90 days.

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

LEONS FURNITURE  vs.  PING AN INSURANCH

LEONS FURNITURE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LEONS FURNITURE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LEONS FURNITURE reported solid returns over the last few months and may actually be approaching a breakup point.

PING AN INSURANCH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PING AN INSURANCH are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PING AN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LEONS FURNITURE and PING AN

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

The idea behind LEONS FURNITURE and PING AN INSURANCH 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.