Correlation Between PING AN and Wilmar International

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

Diversification Opportunities for PING AN and Wilmar International

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between PING and Wilmar is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PING AN INSURANCH and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of PING AN i.e., PING AN and Wilmar International go up and down completely randomly.

Pair Corralation between PING AN and Wilmar International

Assuming the 90 days trading horizon PING AN INSURANCH is expected to generate 1.03 times more return on investment than Wilmar International. However, PING AN is 1.03 times more volatile than Wilmar International Limited. It trades about 0.12 of its potential returns per unit of risk. Wilmar International Limited is currently generating about 0.01 per unit of risk. If you would invest  972.00  in PING AN INSURANCH on April 23, 2025 and sell it today you would earn a total of  158.00  from holding PING AN INSURANCH or generate 16.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.44%
ValuesDaily Returns

PING AN INSURANCH  vs.  Wilmar International Limited

 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.
Wilmar International 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Wilmar International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Wilmar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PING AN and Wilmar International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PING AN and Wilmar International

The main advantage of trading using opposite PING AN and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PING AN position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.
The idea behind PING AN INSURANCH and Wilmar International Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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