Correlation Between FSPG Hi and Huadong Medicine
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By analyzing existing cross correlation between FSPG Hi Tech Co and Huadong Medicine Co, you can compare the effects of market volatilities on FSPG Hi and Huadong Medicine 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 FSPG Hi with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of FSPG Hi and Huadong Medicine.
Diversification Opportunities for FSPG Hi and Huadong Medicine
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FSPG and Huadong is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FSPG Hi Tech Co and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and FSPG Hi 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 FSPG Hi Tech Co are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of FSPG Hi i.e., FSPG Hi and Huadong Medicine go up and down completely randomly.
Pair Corralation between FSPG Hi and Huadong Medicine
Assuming the 90 days trading horizon FSPG Hi Tech Co is expected to generate 2.35 times more return on investment than Huadong Medicine. However, FSPG Hi is 2.35 times more volatile than Huadong Medicine Co. It trades about 0.12 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of risk. If you would invest 424.00 in FSPG Hi Tech Co on October 14, 2024 and sell it today you would earn a total of 139.00 from holding FSPG Hi Tech Co or generate 32.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
FSPG Hi Tech Co vs. Huadong Medicine Co
Performance |
| Timeline |
| FSPG Hi Tech |
| Huadong Medicine |
FSPG Hi and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FSPG Hi and Huadong Medicine
The main advantage of trading using opposite FSPG Hi and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FSPG Hi position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| FSPG Hi vs. Shanghai Broadband Technology | FSPG Hi vs. Guilin Seamild Foods | FSPG Hi vs. Jiangsu Broadcasting Cable | FSPG Hi vs. Zhengping RoadBridge Constr |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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