Correlation Between Zhejiang Construction and Meinian Onehealth
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By analyzing existing cross correlation between Zhejiang Construction Investment and Meinian Onehealth Healthcare, you can compare the effects of market volatilities on Zhejiang Construction and Meinian Onehealth 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 Zhejiang Construction with a short position of Meinian Onehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Meinian Onehealth.
Diversification Opportunities for Zhejiang Construction and Meinian Onehealth
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Meinian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Meinian Onehealth Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meinian Onehealth and Zhejiang Construction 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 Zhejiang Construction Investment are associated (or correlated) with Meinian Onehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meinian Onehealth has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Meinian Onehealth go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Meinian Onehealth
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Meinian Onehealth. In addition to that, Zhejiang Construction is 1.12 times more volatile than Meinian Onehealth Healthcare. It trades about -0.63 of its total potential returns per unit of risk. Meinian Onehealth Healthcare is currently generating about -0.66 per unit of volatility. If you would invest 527.00 in Meinian Onehealth Healthcare on October 14, 2024 and sell it today you would lose (108.00) from holding Meinian Onehealth Healthcare or give up 20.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Meinian Onehealth Healthcare
Performance |
| Timeline |
| Zhejiang Construction |
| Meinian Onehealth |
Zhejiang Construction and Meinian Onehealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Meinian Onehealth
The main advantage of trading using opposite Zhejiang Construction and Meinian Onehealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Meinian Onehealth 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 Meinian Onehealth will offset losses from the drop in Meinian Onehealth's long position.The idea behind Zhejiang Construction Investment and Meinian Onehealth Healthcare 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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