Correlation Between Hunan Investment and Winner Medical

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Can any of the company-specific risk be diversified away by investing in both Hunan Investment and Winner Medical 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 Hunan Investment and Winner Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunan Investment Group and Winner Medical Co, you can compare the effects of market volatilities on Hunan Investment and Winner Medical 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 Hunan Investment with a short position of Winner Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Winner Medical.

Diversification Opportunities for Hunan Investment and Winner Medical

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Hunan and Winner is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and Winner Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Medical and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with Winner Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Medical has no effect on the direction of Hunan Investment i.e., Hunan Investment and Winner Medical go up and down completely randomly.

Pair Corralation between Hunan Investment and Winner Medical

Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 1.44 times more return on investment than Winner Medical. However, Hunan Investment is 1.44 times more volatile than Winner Medical Co. It trades about 0.17 of its potential returns per unit of risk. Winner Medical Co is currently generating about 0.21 per unit of risk. If you would invest  530.00  in Hunan Investment Group on September 12, 2024 and sell it today you would earn a total of  68.00  from holding Hunan Investment Group or generate 12.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Hunan Investment Group  vs.  Winner Medical Co

 Performance 
       Timeline  
Hunan Investment 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Hunan Investment Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan Investment sustained solid returns over the last few months and may actually be approaching a breakup point.
Winner Medical 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Winner Medical Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winner Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Hunan Investment and Winner Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hunan Investment and Winner Medical

The main advantage of trading using opposite Hunan Investment and Winner Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, Winner Medical 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 Winner Medical will offset losses from the drop in Winner Medical's long position.
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The idea behind Hunan Investment Group and Winner Medical Co 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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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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