Correlation Between PKU HealthCare and Suofeiya Home

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

Diversification Opportunities for PKU HealthCare and Suofeiya Home

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between PKU and Suofeiya is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PKU HealthCare Corp and Suofeiya Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suofeiya Home Collection and PKU HealthCare 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 PKU HealthCare Corp are associated (or correlated) with Suofeiya Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suofeiya Home Collection has no effect on the direction of PKU HealthCare i.e., PKU HealthCare and Suofeiya Home go up and down completely randomly.

Pair Corralation between PKU HealthCare and Suofeiya Home

Assuming the 90 days trading horizon PKU HealthCare Corp is expected to under-perform the Suofeiya Home. In addition to that, PKU HealthCare is 2.41 times more volatile than Suofeiya Home Collection. It trades about -0.17 of its total potential returns per unit of risk. Suofeiya Home Collection is currently generating about -0.33 per unit of volatility. If you would invest  1,723  in Suofeiya Home Collection on October 20, 2024 and sell it today you would lose (216.00) from holding Suofeiya Home Collection or give up 12.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

PKU HealthCare Corp  vs.  Suofeiya Home Collection

 Performance 
       Timeline  
PKU HealthCare Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PKU HealthCare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PKU HealthCare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Suofeiya Home Collection 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Suofeiya Home Collection has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PKU HealthCare and Suofeiya Home Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PKU HealthCare and Suofeiya Home

The main advantage of trading using opposite PKU HealthCare and Suofeiya Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKU HealthCare position performs unexpectedly, Suofeiya Home 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 Suofeiya Home will offset losses from the drop in Suofeiya Home's long position.
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The idea behind PKU HealthCare Corp and Suofeiya Home Collection 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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