Correlation Between Ping An and SSR Mining

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

Diversification Opportunities for Ping An and SSR Mining

-0.25

Correlation Coefficient

Ping An  SSR Mining

Very good diversification

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

Pair Corralation between Ping An and SSR Mining

Assuming the 90 days horizon Ping An Insurance is expected to generate 1.37 times more return on investment than SSR Mining. However, Ping An is 1.37 times more volatile than SSR Mining. It trades about 0.32 of its potential returns per unit of risk. SSR Mining is currently generating about 0.22 per unit of risk. If you would invest  841.00  in Ping An Insurance on February 8, 2024 and sell it today you would earn a total of  184.00  from holding Ping An Insurance or generate 21.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

Ping An Insurance  vs.  SSR Mining

Ping An Insurance

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ping An showed solid returns over the last few months and may actually be approaching a breakup point.

SSR Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSR Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ping An and SSR Mining

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

The idea behind Ping An Insurance and SSR Mining 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.