Correlation Between PING AN and CHINA PACINGRGDR5

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Can any of the company-specific risk be diversified away by investing in both PING AN and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PING AN INSURANCH and CHINA PACINGRGDR5 YC1, you can compare the effects of market volatilities on PING AN and CHINA PACINGRGDR5 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 CHINA PACINGRGDR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of PING AN and CHINA PACINGRGDR5.

Diversification Opportunities for PING AN and CHINA PACINGRGDR5

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between PING and CHINA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PING AN INSURANCH and CHINA PACINGRGDR5 YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA PACINGRGDR5 YC1 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 INSURANCH are associated (or correlated) with CHINA PACINGRGDR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA PACINGRGDR5 YC1 has no effect on the direction of PING AN i.e., PING AN and CHINA PACINGRGDR5 go up and down completely randomly.

Pair Corralation between PING AN and CHINA PACINGRGDR5

Assuming the 90 days trading horizon PING AN is expected to generate 2.17 times less return on investment than CHINA PACINGRGDR5. In addition to that, PING AN is 1.09 times more volatile than CHINA PACINGRGDR5 YC1. It trades about 0.03 of its total potential returns per unit of risk. CHINA PACINGRGDR5 YC1 is currently generating about 0.07 per unit of volatility. If you would invest  1,892  in CHINA PACINGRGDR5 YC1 on April 21, 2025 and sell it today you would earn a total of  228.00  from holding CHINA PACINGRGDR5 YC1 or generate 12.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

PING AN INSURANCH  vs.  CHINA PACINGRGDR5 YC1

 Performance 
       Timeline  
PING AN INSURANCH 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
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.
CHINA PACINGRGDR5 YC1 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CHINA PACINGRGDR5 YC1 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, CHINA PACINGRGDR5 reported solid returns over the last few months and may actually be approaching a breakup point.

PING AN and CHINA PACINGRGDR5 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PING AN and CHINA PACINGRGDR5

The main advantage of trading using opposite PING AN and CHINA PACINGRGDR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PING AN position performs unexpectedly, CHINA PACINGRGDR5 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 CHINA PACINGRGDR5 will offset losses from the drop in CHINA PACINGRGDR5's long position.
The idea behind PING AN INSURANCH and CHINA PACINGRGDR5 YC1 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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