Correlation Between Hengkang Medical and Xiamen Bank
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By analyzing existing cross correlation between Hengkang Medical Group and Xiamen Bank Co, you can compare the effects of market volatilities on Hengkang Medical and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Xiamen Bank.
Diversification Opportunities for Hengkang Medical and Xiamen Bank
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengkang and Xiamen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Xiamen Bank go up and down completely randomly.
Pair Corralation between Hengkang Medical and Xiamen Bank
Assuming the 90 days trading horizon Hengkang Medical Group is expected to generate 2.26 times more return on investment than Xiamen Bank. However, Hengkang Medical is 2.26 times more volatile than Xiamen Bank Co. It trades about 0.18 of its potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.2 per unit of risk. If you would invest 256.00 in Hengkang Medical Group on September 5, 2024 and sell it today you would earn a total of 44.00 from holding Hengkang Medical Group or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengkang Medical Group vs. Xiamen Bank Co
Performance |
| Timeline |
| Hengkang Medical |
| Xiamen Bank |
Hengkang Medical and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and Xiamen Bank
The main advantage of trading using opposite Hengkang Medical and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.| Hengkang Medical vs. Industrial and Commercial | Hengkang Medical vs. Agricultural Bank of | Hengkang Medical vs. China Construction Bank | Hengkang Medical vs. Bank of China |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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