Correlation Between Ping An and Heilongjiang Publishing

Can any of the company-specific risk be diversified away by investing in both Ping An and Heilongjiang Publishing 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 Heilongjiang Publishing 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 Heilongjiang Publishing Media, you can compare the effects of market volatilities on Ping An and Heilongjiang Publishing 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 Heilongjiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Heilongjiang Publishing.

Diversification Opportunities for Ping An and Heilongjiang Publishing

0.3

Correlation Coefficient

Ping An  Heilongjiang Publishing

Weak diversification

The 3 months correlation between Ping and Heilongjiang is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Heilongjiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Publishing 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 Heilongjiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Publishing has no effect on the direction of Ping An i.e., Ping An and Heilongjiang Publishing go up and down completely randomly.

Pair Corralation between Ping An and Heilongjiang Publishing

Assuming the 90 days trading horizon Ping An is expected to generate 2.02 times less return on investment than Heilongjiang Publishing. But when comparing it to its historical volatility, Ping An Insurance is 1.38 times less risky than Heilongjiang Publishing. It trades about 0.05 of its potential returns per unit of risk. Heilongjiang Publishing Media is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,358  in Heilongjiang Publishing Media on September 26, 2024 and sell it today you would earn a total of  192.00  from holding Heilongjiang Publishing Media or generate 14.14% return on investment over 90 days.

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

Ping An Insurance  vs.  Heilongjiang Publishing Media

Ping An Insurance

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ping An may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Heilongjiang Publishing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heilongjiang Publishing Media are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heilongjiang Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ping An and Heilongjiang Publishing

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

The idea behind Ping An Insurance and Heilongjiang Publishing Media 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.