Correlation Between Meinian Onehealth and Sichuan Hebang
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By analyzing existing cross correlation between Meinian Onehealth Healthcare and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Meinian Onehealth and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meinian Onehealth and Sichuan Hebang.
Diversification Opportunities for Meinian Onehealth and Sichuan Hebang
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meinian and Sichuan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Meinian Onehealth Healthcare and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Meinian Onehealth i.e., Meinian Onehealth and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Meinian Onehealth and Sichuan Hebang
Assuming the 90 days trading horizon Meinian Onehealth Healthcare is expected to generate 1.1 times more return on investment than Sichuan Hebang. However, Meinian Onehealth is 1.1 times more volatile than Sichuan Hebang Biotechnology. It trades about 0.05 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.15 per unit of risk. If you would invest 431.00 in Meinian Onehealth Healthcare on November 7, 2024 and sell it today you would earn a total of 5.00 from holding Meinian Onehealth Healthcare or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meinian Onehealth Healthcare vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Meinian Onehealth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sichuan Hebang Biote |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Meinian Onehealth and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meinian Onehealth and Sichuan Hebang
The main advantage of trading using opposite Meinian Onehealth and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meinian Onehealth position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.The idea behind Meinian Onehealth Healthcare and Sichuan Hebang Biotechnology 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.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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