Correlation Between Lepu Medical and Jiangsu Hoperun
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By analyzing existing cross correlation between Lepu Medical Tech and Jiangsu Hoperun Software, you can compare the effects of market volatilities on Lepu Medical and Jiangsu Hoperun 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 Lepu Medical with a short position of Jiangsu Hoperun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepu Medical and Jiangsu Hoperun.
Diversification Opportunities for Lepu Medical and Jiangsu Hoperun
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lepu and Jiangsu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lepu Medical Tech and Jiangsu Hoperun Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Hoperun Software and Lepu 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 Lepu Medical Tech are associated (or correlated) with Jiangsu Hoperun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Hoperun Software has no effect on the direction of Lepu Medical i.e., Lepu Medical and Jiangsu Hoperun go up and down completely randomly.
Pair Corralation between Lepu Medical and Jiangsu Hoperun
Assuming the 90 days trading horizon Lepu Medical Tech is expected to under-perform the Jiangsu Hoperun. But the stock apears to be less risky and, when comparing its historical volatility, Lepu Medical Tech is 2.89 times less risky than Jiangsu Hoperun. The stock trades about -0.24 of its potential returns per unit of risk. The Jiangsu Hoperun Software is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,420 in Jiangsu Hoperun Software on November 7, 2024 and sell it today you would earn a total of 362.00 from holding Jiangsu Hoperun Software or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lepu Medical Tech vs. Jiangsu Hoperun Software
Performance |
| Timeline |
| Lepu Medical Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Hoperun Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lepu Medical and Jiangsu Hoperun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepu Medical and Jiangsu Hoperun
The main advantage of trading using opposite Lepu Medical and Jiangsu Hoperun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepu Medical position performs unexpectedly, Jiangsu Hoperun 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 Jiangsu Hoperun will offset losses from the drop in Jiangsu Hoperun's long position.The idea behind Lepu Medical Tech and Jiangsu Hoperun Software 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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