Correlation Between Siriuspoint and Ping An

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

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

Diversification Opportunities for Siriuspoint and Ping An

0.29

Correlation Coefficient

Siriuspoint  Ping An

Modest diversification

The 3 months correlation between Siriuspoint and Ping is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance and Siriuspoint 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 Siriuspoint 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 Insurance has no effect on the direction of Siriuspoint i.e., Siriuspoint and Ping An go up and down completely randomly.

Pair Corralation between Siriuspoint and Ping An

Given the investment horizon of 90 days Siriuspoint is expected to generate 0.78 times more return on investment than Ping An. However, Siriuspoint is 1.28 times less risky than Ping An. It trades about 0.01 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.07 per unit of risk. If you would invest  1,217  in Siriuspoint on January 25, 2024 and sell it today you would earn a total of  2.50  from holding Siriuspoint or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Siriuspoint  vs.  Ping An Insurance

Siriuspoint

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Siriuspoint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Siriuspoint is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ping An Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Ping An is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Siriuspoint and Ping An

The main advantage of trading using opposite Siriuspoint and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siriuspoint 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 Siriuspoint and Ping An Insurance 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.