Correlation Between Hengkang Medical and Chahua Modern
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By analyzing existing cross correlation between Hengkang Medical Group and Chahua Modern Housewares, you can compare the effects of market volatilities on Hengkang Medical and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Chahua Modern.
Diversification Opportunities for Hengkang Medical and Chahua Modern
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hengkang and Chahua is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Chahua Modern go up and down completely randomly.
Pair Corralation between Hengkang Medical and Chahua Modern
Assuming the 90 days trading horizon Hengkang Medical Group is expected to under-perform the Chahua Modern. But the stock apears to be less risky and, when comparing its historical volatility, Hengkang Medical Group is 1.06 times less risky than Chahua Modern. The stock trades about -0.01 of its potential returns per unit of risk. The Chahua Modern Housewares is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,842 in Chahua Modern Housewares on August 28, 2024 and sell it today you would earn a total of 429.00 from holding Chahua Modern Housewares or generate 23.29% 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. Chahua Modern Housewares
Performance |
| Timeline |
| Hengkang Medical |
| Chahua Modern Housewares |
Hengkang Medical and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and Chahua Modern
The main advantage of trading using opposite Hengkang Medical and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern'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 |
| Chahua Modern vs. Lutian Machinery Co | Chahua Modern vs. China Longyuan Power | Chahua Modern vs. Changshu Tongrun Auto | Chahua Modern vs. PetroChina Co Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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