Correlation Between Double Medical and New China
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By analyzing existing cross correlation between Double Medical Technology and New China Life, you can compare the effects of market volatilities on Double Medical and New China 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 Double Medical with a short position of New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Medical and New China.
Diversification Opportunities for Double Medical and New China
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Double and New is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Double Medical Technology and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life and Double 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 Double Medical Technology are associated (or correlated) with New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Double Medical i.e., Double Medical and New China go up and down completely randomly.
Pair Corralation between Double Medical and New China
Assuming the 90 days trading horizon Double Medical is expected to generate 1.14 times less return on investment than New China. But when comparing it to its historical volatility, Double Medical Technology is 1.22 times less risky than New China. It trades about 0.2 of its potential returns per unit of risk. New China Life is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,316 in New China Life on September 2, 2024 and sell it today you would earn a total of 1,420 from holding New China Life or generate 42.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Double Medical Technology vs. New China Life
Performance |
| Timeline |
| Double Medical Technology |
| New China Life |
Double Medical and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Double Medical and New China
The main advantage of trading using opposite Double Medical and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double Medical position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Double Medical vs. Zhongtong Guomai Communication | Double Medical vs. SUNSEA Telecommunications Co | Double Medical vs. Dr Peng Telecom | Double Medical vs. Wuhan Yangtze Communication |
| New China vs. Xinjiang Communications Construction | New China vs. JCHX Mining Management | New China vs. Chengtun Mining Group | New China vs. Pengxin International Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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