Correlation Between Innovative Medical and Sinotrans
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By analyzing existing cross correlation between Innovative Medical Management and Sinotrans Ltd Class, you can compare the effects of market volatilities on Innovative Medical and Sinotrans 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 Sinotrans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Sinotrans.
Diversification Opportunities for Innovative Medical and Sinotrans
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Innovative and Sinotrans is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Sinotrans Ltd Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinotrans Class 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 Sinotrans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinotrans Class has no effect on the direction of Innovative Medical i.e., Innovative Medical and Sinotrans go up and down completely randomly.
Pair Corralation between Innovative Medical and Sinotrans
Assuming the 90 days trading horizon Innovative Medical Management is expected to generate 1.66 times more return on investment than Sinotrans. However, Innovative Medical is 1.66 times more volatile than Sinotrans Ltd Class. It trades about 0.03 of its potential returns per unit of risk. Sinotrans Ltd Class is currently generating about 0.04 per unit of risk. If you would invest 721.00 in Innovative Medical Management on November 8, 2024 and sell it today you would earn a total of 148.00 from holding Innovative Medical Management or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Medical Management vs. Sinotrans Ltd Class
Performance |
| Timeline |
| Innovative Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sinotrans Class |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Innovative Medical and Sinotrans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and Sinotrans
The main advantage of trading using opposite Innovative Medical and Sinotrans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Sinotrans 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 Sinotrans will offset losses from the drop in Sinotrans' long position.The idea behind Innovative Medical Management and Sinotrans Ltd Class 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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