Correlation Between Guangzhou Zhujiang and Allmed Medical
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Allmed Medical Products, you can compare the effects of market volatilities on Guangzhou Zhujiang and Allmed Medical 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 Guangzhou Zhujiang with a short position of Allmed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Allmed Medical.
Diversification Opportunities for Guangzhou Zhujiang and Allmed Medical
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangzhou and Allmed is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Allmed Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allmed Medical Products and Guangzhou Zhujiang 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 Guangzhou Zhujiang Brewery are associated (or correlated) with Allmed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allmed Medical Products has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Allmed Medical go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Allmed Medical
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to under-perform the Allmed Medical. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Zhujiang Brewery is 2.08 times less risky than Allmed Medical. The stock trades about -0.27 of its potential returns per unit of risk. The Allmed Medical Products is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 865.00 in Allmed Medical Products on November 8, 2024 and sell it today you would earn a total of 74.00 from holding Allmed Medical Products or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Allmed Medical Products
Performance |
| Timeline |
| Guangzhou Zhujiang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Allmed Medical Products |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Guangzhou Zhujiang and Allmed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Allmed Medical
The main advantage of trading using opposite Guangzhou Zhujiang and Allmed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Allmed Medical 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 Allmed Medical will offset losses from the drop in Allmed Medical's long position.The idea behind Guangzhou Zhujiang Brewery and Allmed Medical Products 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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