Correlation Between Hengkang Medical and Dezhan HealthCare
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By analyzing existing cross correlation between Hengkang Medical Group and Dezhan HealthCare Co, you can compare the effects of market volatilities on Hengkang Medical and Dezhan HealthCare 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 Dezhan HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Dezhan HealthCare.
Diversification Opportunities for Hengkang Medical and Dezhan HealthCare
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengkang and Dezhan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Dezhan HealthCare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dezhan HealthCare 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 Dezhan HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dezhan HealthCare has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Dezhan HealthCare go up and down completely randomly.
Pair Corralation between Hengkang Medical and Dezhan HealthCare
Assuming the 90 days trading horizon Hengkang Medical Group is expected to under-perform the Dezhan HealthCare. But the stock apears to be less risky and, when comparing its historical volatility, Hengkang Medical Group is 1.15 times less risky than Dezhan HealthCare. The stock trades about -0.26 of its potential returns per unit of risk. The Dezhan HealthCare Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Dezhan HealthCare Co on November 7, 2024 and sell it today you would lose (7.00) from holding Dezhan HealthCare Co or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengkang Medical Group vs. Dezhan HealthCare Co
Performance |
| Timeline |
| Hengkang Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dezhan HealthCare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hengkang Medical and Dezhan HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and Dezhan HealthCare
The main advantage of trading using opposite Hengkang Medical and Dezhan HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Dezhan HealthCare 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 Dezhan HealthCare will offset losses from the drop in Dezhan HealthCare's long position.The idea behind Hengkang Medical Group and Dezhan HealthCare Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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