Correlation Between Zhongfu Information and Humanwell Healthcare
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By analyzing existing cross correlation between Zhongfu Information and Humanwell Healthcare Group, you can compare the effects of market volatilities on Zhongfu Information and Humanwell Healthcare 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 Zhongfu Information with a short position of Humanwell Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongfu Information and Humanwell Healthcare.
Diversification Opportunities for Zhongfu Information and Humanwell Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhongfu and Humanwell is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zhongfu Information and Humanwell Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humanwell Healthcare and Zhongfu Information 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 Zhongfu Information are associated (or correlated) with Humanwell Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humanwell Healthcare has no effect on the direction of Zhongfu Information i.e., Zhongfu Information and Humanwell Healthcare go up and down completely randomly.
Pair Corralation between Zhongfu Information and Humanwell Healthcare
Assuming the 90 days trading horizon Zhongfu Information is expected to generate 1.19 times more return on investment than Humanwell Healthcare. However, Zhongfu Information is 1.19 times more volatile than Humanwell Healthcare Group. It trades about 0.22 of its potential returns per unit of risk. Humanwell Healthcare Group is currently generating about 0.05 per unit of risk. If you would invest 1,496 in Zhongfu Information on November 7, 2024 and sell it today you would earn a total of 154.00 from holding Zhongfu Information or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongfu Information vs. Humanwell Healthcare Group
Performance |
| Timeline |
| Zhongfu Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Humanwell Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zhongfu Information and Humanwell Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongfu Information and Humanwell Healthcare
The main advantage of trading using opposite Zhongfu Information and Humanwell Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongfu Information position performs unexpectedly, Humanwell Healthcare 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 Humanwell Healthcare will offset losses from the drop in Humanwell Healthcare's long position.The idea behind Zhongfu Information and Humanwell Healthcare Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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