Correlation Between Jiangxi Hengda and CareRay Digital
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and CareRay Digital Medical, you can compare the effects of market volatilities on Jiangxi Hengda and CareRay Digital 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 Jiangxi Hengda with a short position of CareRay Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and CareRay Digital.
Diversification Opportunities for Jiangxi Hengda and CareRay Digital
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangxi and CareRay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and CareRay Digital Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareRay Digital Medical and Jiangxi Hengda 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 Jiangxi Hengda Hi Tech are associated (or correlated) with CareRay Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareRay Digital Medical has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and CareRay Digital go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and CareRay Digital
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to generate 1.04 times more return on investment than CareRay Digital. However, Jiangxi Hengda is 1.04 times more volatile than CareRay Digital Medical. It trades about 0.01 of its potential returns per unit of risk. CareRay Digital Medical is currently generating about 0.0 per unit of risk. If you would invest 617.00 in Jiangxi Hengda Hi Tech on August 31, 2024 and sell it today you would lose (38.00) from holding Jiangxi Hengda Hi Tech or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. CareRay Digital Medical
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| CareRay Digital Medical |
Jiangxi Hengda and CareRay Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and CareRay Digital
The main advantage of trading using opposite Jiangxi Hengda and CareRay Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, CareRay Digital 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 CareRay Digital will offset losses from the drop in CareRay Digital's long position.The idea behind Jiangxi Hengda Hi Tech and CareRay Digital Medical 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.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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