Correlation Between Hengkang Medical and China Reform
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By analyzing existing cross correlation between Hengkang Medical Group and China Reform Health, you can compare the effects of market volatilities on Hengkang Medical and China Reform 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 Hengkang Medical with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and China Reform.
Diversification Opportunities for Hengkang Medical and China Reform
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hengkang and China is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Hengkang 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 Hengkang Medical Group are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and China Reform go up and down completely randomly.
Pair Corralation between Hengkang Medical and China Reform
Assuming the 90 days trading horizon Hengkang Medical is expected to generate 1.5 times less return on investment than China Reform. But when comparing it to its historical volatility, Hengkang Medical Group is 1.21 times less risky than China Reform. It trades about 0.19 of its potential returns per unit of risk. China Reform Health is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 681.00 in China Reform Health on August 29, 2024 and sell it today you would earn a total of 579.00 from holding China Reform Health or generate 85.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengkang Medical Group vs. China Reform Health
Performance |
| Timeline |
| Hengkang Medical |
| China Reform Health |
Hengkang Medical and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and China Reform
The main advantage of trading using opposite Hengkang Medical and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, China Reform 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 Reform will offset losses from the drop in China Reform's long position.| Hengkang Medical vs. Industrial and Commercial | Hengkang Medical vs. China Construction Bank | Hengkang Medical vs. Agricultural Bank of | Hengkang Medical vs. Bank of China |
| China Reform vs. Industrial and Commercial | China Reform vs. China Construction Bank | China Reform vs. Agricultural Bank of | China Reform vs. Bank of China |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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