Correlation Between Innovative Medical and Chengdu Xingrong
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By analyzing existing cross correlation between Innovative Medical Management and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Innovative Medical and Chengdu Xingrong 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 Innovative Medical with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Chengdu Xingrong.
Diversification Opportunities for Innovative Medical and Chengdu Xingrong
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innovative and Chengdu is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Innovative Medical 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 Innovative Medical Management are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Innovative Medical i.e., Innovative Medical and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Innovative Medical and Chengdu Xingrong
Assuming the 90 days trading horizon Innovative Medical is expected to generate 1.02 times less return on investment than Chengdu Xingrong. In addition to that, Innovative Medical is 2.1 times more volatile than Chengdu Xingrong Investment. It trades about 0.03 of its total potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about 0.06 per unit of volatility. If you would invest 481.00 in Chengdu Xingrong Investment on October 26, 2024 and sell it today you would earn a total of 229.00 from holding Chengdu Xingrong Investment or generate 47.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Medical Management vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Innovative Medical |
| Chengdu Xingrong Inv |
Innovative Medical and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and Chengdu Xingrong
The main advantage of trading using opposite Innovative Medical and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.The idea behind Innovative Medical Management and Chengdu Xingrong Investment 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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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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