Correlation Between Innovative Medical and Anhui Huaertai
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By analyzing existing cross correlation between Innovative Medical Management and Anhui Huaertai Chemical, you can compare the effects of market volatilities on Innovative Medical and Anhui Huaertai 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 Anhui Huaertai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Anhui Huaertai.
Diversification Opportunities for Innovative Medical and Anhui Huaertai
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innovative and Anhui is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Anhui Huaertai Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaertai Chemical 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 Anhui Huaertai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaertai Chemical has no effect on the direction of Innovative Medical i.e., Innovative Medical and Anhui Huaertai go up and down completely randomly.
Pair Corralation between Innovative Medical and Anhui Huaertai
Assuming the 90 days trading horizon Innovative Medical is expected to generate 1.02 times less return on investment than Anhui Huaertai. In addition to that, Innovative Medical is 1.09 times more volatile than Anhui Huaertai Chemical. It trades about 0.02 of its total potential returns per unit of risk. Anhui Huaertai Chemical is currently generating about 0.03 per unit of volatility. If you would invest 1,181 in Anhui Huaertai Chemical on September 12, 2024 and sell it today you would earn a total of 126.00 from holding Anhui Huaertai Chemical or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Medical Management vs. Anhui Huaertai Chemical
Performance |
| Timeline |
| Innovative Medical |
| Anhui Huaertai Chemical |
Innovative Medical and Anhui Huaertai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and Anhui Huaertai
The main advantage of trading using opposite Innovative Medical and Anhui Huaertai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Anhui Huaertai 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 Anhui Huaertai will offset losses from the drop in Anhui Huaertai's long position.The idea behind Innovative Medical Management and Anhui Huaertai Chemical 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 Stocks Directory module to find actively traded stocks across global markets.
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