Correlation Between Meinian Onehealth and Lushang Property

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

Diversification Opportunities for Meinian Onehealth and Lushang Property

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Meinian and Lushang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Meinian Onehealth Healthcare and Lushang Property Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lushang Property and Meinian Onehealth 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 Meinian Onehealth Healthcare are associated (or correlated) with Lushang Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lushang Property has no effect on the direction of Meinian Onehealth i.e., Meinian Onehealth and Lushang Property go up and down completely randomly.

Pair Corralation between Meinian Onehealth and Lushang Property

Assuming the 90 days trading horizon Meinian Onehealth Healthcare is expected to generate 1.63 times more return on investment than Lushang Property. However, Meinian Onehealth is 1.63 times more volatile than Lushang Property Co. It trades about 0.09 of its potential returns per unit of risk. Lushang Property Co is currently generating about 0.04 per unit of risk. If you would invest  502.00  in Meinian Onehealth Healthcare on September 12, 2024 and sell it today you would earn a total of  24.00  from holding Meinian Onehealth Healthcare or generate 4.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Meinian Onehealth Healthcare  vs.  Lushang Property Co

 Performance 
       Timeline  
Meinian Onehealth 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Meinian Onehealth Healthcare are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meinian Onehealth sustained solid returns over the last few months and may actually be approaching a breakup point.
Lushang Property 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lushang Property Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lushang Property sustained solid returns over the last few months and may actually be approaching a breakup point.

Meinian Onehealth and Lushang Property Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Meinian Onehealth and Lushang Property

The main advantage of trading using opposite Meinian Onehealth and Lushang Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meinian Onehealth position performs unexpectedly, Lushang Property 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 Lushang Property will offset losses from the drop in Lushang Property's long position.
The idea behind Meinian Onehealth Healthcare and Lushang Property 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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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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