Correlation Between Innovative Medical and China Mobile
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By analyzing existing cross correlation between Innovative Medical Management and China Mobile Limited, you can compare the effects of market volatilities on Innovative Medical and China Mobile 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 China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and China Mobile.
Diversification Opportunities for Innovative Medical and China Mobile
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innovative and China is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and China Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile Limited 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 China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mobile Limited has no effect on the direction of Innovative Medical i.e., Innovative Medical and China Mobile go up and down completely randomly.
Pair Corralation between Innovative Medical and China Mobile
Assuming the 90 days trading horizon Innovative Medical Management is expected to under-perform the China Mobile. In addition to that, Innovative Medical is 3.96 times more volatile than China Mobile Limited. It trades about 0.0 of its total potential returns per unit of risk. China Mobile Limited is currently generating about -0.01 per unit of volatility. If you would invest 11,115 in China Mobile Limited on November 7, 2024 and sell it today you would lose (18.00) from holding China Mobile Limited or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Medical Management vs. China Mobile Limited
Performance |
| Timeline |
| Innovative Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Mobile Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Innovative Medical and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and China Mobile
The main advantage of trading using opposite Innovative Medical and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.The idea behind Innovative Medical Management and China Mobile Limited 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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