Correlation Between Hengkang Medical and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between Hengkang Medical Group and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on Hengkang Medical and Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Guangzhou Ruoyuchen.
Diversification Opportunities for Hengkang Medical and Guangzhou Ruoyuchen
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hengkang and Guangzhou is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between Hengkang Medical and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon Hengkang Medical Group is expected to under-perform the Guangzhou Ruoyuchen. But the stock apears to be less risky and, when comparing its historical volatility, Hengkang Medical Group is 1.9 times less risky than Guangzhou Ruoyuchen. The stock trades about -0.12 of its potential returns per unit of risk. The Guangzhou Ruoyuchen Information is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,703 in Guangzhou Ruoyuchen Information on November 8, 2024 and sell it today you would earn a total of 142.00 from holding Guangzhou Ruoyuchen Information or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengkang Medical Group vs. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| Hengkang Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangzhou Ruoyuchen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Hengkang Medical and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and Guangzhou Ruoyuchen
The main advantage of trading using opposite Hengkang Medical and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.The idea behind Hengkang Medical Group and Guangzhou Ruoyuchen Information 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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