Correlation Between Innovative Medical and Beijing Seeyon
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By analyzing existing cross correlation between Innovative Medical Management and Beijing Seeyon Internet, you can compare the effects of market volatilities on Innovative Medical and Beijing Seeyon 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 Beijing Seeyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Beijing Seeyon.
Diversification Opportunities for Innovative Medical and Beijing Seeyon
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovative and Beijing is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Beijing Seeyon Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Seeyon Internet 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 Beijing Seeyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Seeyon Internet has no effect on the direction of Innovative Medical i.e., Innovative Medical and Beijing Seeyon go up and down completely randomly.
Pair Corralation between Innovative Medical and Beijing Seeyon
Assuming the 90 days trading horizon Innovative Medical Management is expected to under-perform the Beijing Seeyon. But the stock apears to be less risky and, when comparing its historical volatility, Innovative Medical Management is 1.22 times less risky than Beijing Seeyon. The stock trades about 0.0 of its potential returns per unit of risk. The Beijing Seeyon Internet is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,700 in Beijing Seeyon Internet on November 5, 2024 and sell it today you would earn a total of 664.00 from holding Beijing Seeyon Internet or generate 39.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Medical Management vs. Beijing Seeyon Internet
Performance |
| Timeline |
| Innovative Medical |
| Beijing Seeyon Internet |
Innovative Medical and Beijing Seeyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and Beijing Seeyon
The main advantage of trading using opposite Innovative Medical and Beijing Seeyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Beijing Seeyon 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 Beijing Seeyon will offset losses from the drop in Beijing Seeyon's long position.The idea behind Innovative Medical Management and Beijing Seeyon Internet 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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