Correlation Between Ping An and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Ping An and Manulife Financial 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 Manulife Financial 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 Manulife Financial Corp, you can compare the effects of market volatilities on Ping An and Manulife Financial 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Manulife Financial.
Diversification Opportunities for Ping An and Manulife Financial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ping and Manulife is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp 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 Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Ping An i.e., Ping An and Manulife Financial go up and down completely randomly.
Pair Corralation between Ping An and Manulife Financial
Assuming the 90 days horizon Ping An Insurance is expected to generate 4.13 times more return on investment than Manulife Financial. However, Ping An is 4.13 times more volatile than Manulife Financial Corp. It trades about 0.12 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.07 per unit of risk. If you would invest 415.00 in Ping An Insurance on September 24, 2024 and sell it today you would earn a total of 150.00 from holding Ping An Insurance or generate 36.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Ping An Insurance vs. Manulife Financial Corp
Performance |
Timeline |
Ping An Insurance |
Manulife Financial Corp |
Ping An and Manulife Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ping An and Manulife Financial
The main advantage of trading using opposite Ping An and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Manulife Financial 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.Ping An vs. AIA Group Ltd | Ping An vs. China Life Insurance | Ping An vs. Sanlam Ltd PK | Ping An vs. Lincoln National |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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