Correlation Between Hengkang Medical and Dazhong Transportation
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By analyzing existing cross correlation between Hengkang Medical Group and Dazhong Transportation Group, you can compare the effects of market volatilities on Hengkang Medical and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Dazhong Transportation.
Diversification Opportunities for Hengkang Medical and Dazhong Transportation
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hengkang and Dazhong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Hengkang Medical and Dazhong Transportation
Assuming the 90 days trading horizon Hengkang Medical Group is expected to generate 2.01 times more return on investment than Dazhong Transportation. However, Hengkang Medical is 2.01 times more volatile than Dazhong Transportation Group. It trades about 0.08 of its potential returns per unit of risk. Dazhong Transportation Group is currently generating about 0.01 per unit of risk. If you would invest 290.00 in Hengkang Medical Group on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Hengkang Medical Group or generate 5.52% 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. Dazhong Transportation Group
Performance |
| Timeline |
| Hengkang Medical |
| Dazhong Transportation |
Hengkang Medical and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and Dazhong Transportation
The main advantage of trading using opposite Hengkang Medical and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Hengkang Medical vs. Guangzhou Haige Communications | Hengkang Medical vs. Xinjiang Baodi Mining | Hengkang Medical vs. Zhengzhou Coal Mining | Hengkang Medical vs. Wintao Communications Co |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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