Correlation Between Nanhua Bio and Qingdao Haier
Specify exactly 2 symbols:
By analyzing existing cross correlation between Nanhua Bio Medicine and Qingdao Haier Biomedical, you can compare the effects of market volatilities on Nanhua Bio and Qingdao Haier 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 Nanhua Bio with a short position of Qingdao Haier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Qingdao Haier.
Diversification Opportunities for Nanhua Bio and Qingdao Haier
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanhua and Qingdao is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Qingdao Haier Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Haier Biomedical and Nanhua Bio 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 Nanhua Bio Medicine are associated (or correlated) with Qingdao Haier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Haier Biomedical has no effect on the direction of Nanhua Bio i.e., Nanhua Bio and Qingdao Haier go up and down completely randomly.
Pair Corralation between Nanhua Bio and Qingdao Haier
Assuming the 90 days trading horizon Nanhua Bio Medicine is expected to under-perform the Qingdao Haier. But the stock apears to be less risky and, when comparing its historical volatility, Nanhua Bio Medicine is 1.01 times less risky than Qingdao Haier. The stock trades about -0.01 of its potential returns per unit of risk. The Qingdao Haier Biomedical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,142 in Qingdao Haier Biomedical on September 4, 2024 and sell it today you would earn a total of 232.00 from holding Qingdao Haier Biomedical or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Qingdao Haier Biomedical
Performance |
| Timeline |
| Nanhua Bio Medicine |
| Qingdao Haier Biomedical |
Nanhua Bio and Qingdao Haier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Qingdao Haier
The main advantage of trading using opposite Nanhua Bio and Qingdao Haier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio position performs unexpectedly, Qingdao Haier 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 Qingdao Haier will offset losses from the drop in Qingdao Haier's long position.The idea behind Nanhua Bio Medicine and Qingdao Haier Biomedical 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.| Qingdao Haier vs. Servyou Software Group | Qingdao Haier vs. Gan Yuan Foods | Qingdao Haier vs. China National Software | Qingdao Haier vs. JuneYao Dairy Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |