Correlation Between Dezhan HealthCare and Shanghai Rongtai
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By analyzing existing cross correlation between Dezhan HealthCare Co and Shanghai Rongtai Health, you can compare the effects of market volatilities on Dezhan HealthCare and Shanghai Rongtai 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 Dezhan HealthCare with a short position of Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dezhan HealthCare and Shanghai Rongtai.
Diversification Opportunities for Dezhan HealthCare and Shanghai Rongtai
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dezhan and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dezhan HealthCare Co and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health and Dezhan 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 Dezhan HealthCare Co are associated (or correlated) with Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Dezhan HealthCare i.e., Dezhan HealthCare and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Dezhan HealthCare and Shanghai Rongtai
Assuming the 90 days trading horizon Dezhan HealthCare Co is expected to generate 1.16 times more return on investment than Shanghai Rongtai. However, Dezhan HealthCare is 1.16 times more volatile than Shanghai Rongtai Health. It trades about 0.0 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.01 per unit of risk. If you would invest 372.00 in Dezhan HealthCare Co on September 3, 2024 and sell it today you would lose (53.00) from holding Dezhan HealthCare Co or give up 14.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dezhan HealthCare Co vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Dezhan HealthCare |
| Shanghai Rongtai Health |
Dezhan HealthCare and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dezhan HealthCare and Shanghai Rongtai
The main advantage of trading using opposite Dezhan HealthCare and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dezhan HealthCare position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Dezhan HealthCare vs. Chengdu Kanghua Biological | Dezhan HealthCare vs. Beijing Wantai Biological | Dezhan HealthCare vs. Suzhou Novoprotein Scientific | Dezhan HealthCare vs. Aluminum Corp of |
| Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. China Mobile Limited | Shanghai Rongtai vs. Industrial and Commercial | Shanghai Rongtai vs. China Life Insurance |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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