Correlation Between Innovative Medical and Chengdu Xinzhu
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By analyzing existing cross correlation between Innovative Medical Management and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Innovative Medical and Chengdu Xinzhu 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 Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Chengdu Xinzhu.
Diversification Opportunities for Innovative Medical and Chengdu Xinzhu
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innovative and Chengdu is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge 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 Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Innovative Medical i.e., Innovative Medical and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Innovative Medical and Chengdu Xinzhu
Assuming the 90 days trading horizon Innovative Medical is expected to generate 1.08 times less return on investment than Chengdu Xinzhu. In addition to that, Innovative Medical is 1.15 times more volatile than Chengdu Xinzhu RoadBridge. It trades about 0.07 of its total potential returns per unit of risk. Chengdu Xinzhu RoadBridge is currently generating about 0.09 per unit of volatility. If you would invest 447.00 in Chengdu Xinzhu RoadBridge on October 14, 2024 and sell it today you would earn a total of 90.00 from holding Chengdu Xinzhu RoadBridge or generate 20.13% 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. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Innovative Medical |
| Chengdu Xinzhu RoadBridge |
Innovative Medical and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and Chengdu Xinzhu
The main advantage of trading using opposite Innovative Medical and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Chengdu Xinzhu 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 Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| Innovative Medical vs. Ye Chiu Metal | Innovative Medical vs. Southern PublishingMedia Co | Innovative Medical vs. Ciwen Media Co | Innovative Medical vs. Beijing Enlight Media |
| Chengdu Xinzhu vs. Allgens Medical Technology | Chengdu Xinzhu vs. Innovative Medical Management | Chengdu Xinzhu vs. Fujian Wanchen Biotechnology | Chengdu Xinzhu vs. Guangdong Marubi Biotechnology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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