Correlation Between Guangzhou Boji and Hengkang Medical
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By analyzing existing cross correlation between Guangzhou Boji Medical and Hengkang Medical Group, you can compare the effects of market volatilities on Guangzhou Boji and Hengkang 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 Boji with a short position of Hengkang Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Boji and Hengkang Medical.
Diversification Opportunities for Guangzhou Boji and Hengkang Medical
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Hengkang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Boji Medical and Hengkang Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengkang Medical and Guangzhou Boji 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 Boji Medical are associated (or correlated) with Hengkang Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengkang Medical has no effect on the direction of Guangzhou Boji i.e., Guangzhou Boji and Hengkang Medical go up and down completely randomly.
Pair Corralation between Guangzhou Boji and Hengkang Medical
Assuming the 90 days trading horizon Guangzhou Boji is expected to generate 1.56 times less return on investment than Hengkang Medical. But when comparing it to its historical volatility, Guangzhou Boji Medical is 1.26 times less risky than Hengkang Medical. It trades about 0.06 of its potential returns per unit of risk. Hengkang Medical Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Hengkang Medical Group on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Hengkang Medical Group or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Boji Medical vs. Hengkang Medical Group
Performance |
| Timeline |
| Guangzhou Boji Medical |
| Hengkang Medical |
Guangzhou Boji and Hengkang Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Boji and Hengkang Medical
The main advantage of trading using opposite Guangzhou Boji and Hengkang Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Boji position performs unexpectedly, Hengkang 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 Hengkang Medical will offset losses from the drop in Hengkang Medical's long position.| Guangzhou Boji vs. Cultural Investment Holdings | Guangzhou Boji vs. Gome Telecom Equipment | Guangzhou Boji vs. Holitech Technology Co | Guangzhou Boji vs. Zotye Automobile Co |
| Hengkang Medical vs. Guangzhou Haige Communications | Hengkang Medical vs. Xinjiang Baodi Mining | Hengkang Medical vs. Zhengzhou Coal Mining | Hengkang Medical vs. Wintao Communications Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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