Correlation Between Strainsforpains and Ping An

Can any of the company-specific risk be diversified away by investing in both Strainsforpains and Ping An 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 Strainsforpains and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strainsforpains and Ping An Healthcare, you can compare the effects of market volatilities on Strainsforpains and Ping An 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 Strainsforpains with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strainsforpains and Ping An.

Diversification Opportunities for Strainsforpains and Ping An

0.74

Correlation Coefficient

Strainsforpains  Ping An

Poor diversification

The 3 months correlation between Strainsforpains and Ping is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Strainsforpains and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare and Strainsforpains 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 Strainsforpains are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Healthcare has no effect on the direction of Strainsforpains i.e., Strainsforpains and Ping An go up and down completely randomly.

Pair Corralation between Strainsforpains and Ping An

Given the investment horizon of 90 days Strainsforpains is expected to generate 2.71 times more return on investment than Ping An. However, Strainsforpains is 2.71 times more volatile than Ping An Healthcare. It trades about 0.02 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.13 per unit of risk. If you would invest  20.00  in Strainsforpains on January 26, 2024 and sell it today you would lose (7.00) from holding Strainsforpains or give up 35.0% of portfolio value over 90 days.

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

Strainsforpains  vs.  Ping An Healthcare

Strainsforpains

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strainsforpains are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Strainsforpains demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ping An Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Strainsforpains and Ping An

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

The idea behind Strainsforpains and Ping An Healthcare 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.