Correlation Between Ping An and Applied Materials

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

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

Diversification Opportunities for Ping An and Applied Materials

-0.3

Correlation Coefficient

Ping An  Applied Materials

Very good diversification

The 3 months correlation between Ping and Applied is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Healthcare and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials 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 Healthcare are associated (or correlated) with Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of Ping An i.e., Ping An and Applied Materials go up and down completely randomly.

Pair Corralation between Ping An and Applied Materials

Assuming the 90 days horizon Ping An Healthcare is expected to generate 1.78 times more return on investment than Applied Materials. However, Ping An is 1.78 times more volatile than Applied Materials. It trades about 0.16 of its potential returns per unit of risk. Applied Materials is currently generating about 0.12 per unit of risk. If you would invest  102.00  in Ping An Healthcare on July 25, 2025 and sell it today you would earn a total of  66.00  from holding Ping An Healthcare or generate 64.71% return on investment over 90 days.

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

Ping An Healthcare  vs.  Applied Materials

Ping An Healthcare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Healthcare are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Ping An reported solid returns over the last few months and may actually be approaching a breakup point.

Applied Materials

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Applied Materials reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ping An and Applied Materials

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

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