Correlation Between Ping An and Blackrock Multi

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

Diversification Opportunities for Ping An and Blackrock Multi

0.25

Correlation Coefficient

Ping An  Blackrock Multi

Modest diversification

The 3 months correlation between Ping and Blackrock is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Blackrock Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Multi Sector 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 Blackrock Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Multi Sector has no effect on the direction of Ping An i.e., Ping An and Blackrock Multi go up and down completely randomly.

Pair Corralation between Ping An and Blackrock Multi

Assuming the 90 days horizon Ping An Insurance is expected to under-perform the Blackrock Multi. In addition to that, Ping An is 2.79 times more volatile than Blackrock Multi Sector. It trades about -0.24 of its total potential returns per unit of risk. Blackrock Multi Sector is currently generating about -0.17 per unit of volatility. If you would invest  1,557  in Blackrock Multi Sector on January 20, 2024 and sell it today you would lose (42.00) from holding Blackrock Multi Sector or give up 2.7% of portfolio value over 90 days.

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

Ping An Insurance  vs.  Blackrock Multi Sector

Ping An Insurance

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Ping An is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Multi Sector

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Multi Sector are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Blackrock Multi is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ping An and Blackrock Multi

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

The idea behind Ping An Insurance and Blackrock Multi Sector 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.