Correlation Between PING AN and FirstGroup Plc

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

Diversification Opportunities for PING AN and FirstGroup Plc

0.58

Correlation Coefficient

PING AN  FirstGroup Plc

Very weak diversification

The 3 months correlation between PING and FirstGroup is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PING AN INSURANCH and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc 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 FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of PING AN i.e., PING AN and FirstGroup Plc go up and down completely randomly.

Pair Corralation between PING AN and FirstGroup Plc

Assuming the 90 days trading horizon PING AN is expected to generate 1.84 times less return on investment than FirstGroup Plc. In addition to that, PING AN is 1.09 times more volatile than FirstGroup plc. It trades about 0.12 of its total potential returns per unit of risk. FirstGroup plc is currently generating about 0.25 per unit of volatility. If you would invest  188.00  in FirstGroup plc on April 22, 2025 and sell it today you would earn a total of  69.00  from holding FirstGroup plc or generate 36.7% return on investment over 90 days.

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

PING AN INSURANCH  vs.  FirstGroup plc

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.

FirstGroup plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FirstGroup plc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FirstGroup Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PING AN and FirstGroup Plc

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

The idea behind PING AN INSURANCH and FirstGroup plc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.