Correlation Between Yingde Greatchem and Top Choice
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Top Choice Medical, you can compare the effects of market volatilities on Yingde Greatchem and Top Choice 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 Yingde Greatchem with a short position of Top Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Top Choice.
Diversification Opportunities for Yingde Greatchem and Top Choice
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yingde and Top is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals and Top Choice Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Choice Medical and Yingde Greatchem 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 Yingde Greatchem Chemicals are associated (or correlated) with Top Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Choice Medical has no effect on the direction of Yingde Greatchem i.e., Yingde Greatchem and Top Choice go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Top Choice
Assuming the 90 days trading horizon Yingde Greatchem Chemicals is expected to generate 1.35 times more return on investment than Top Choice. However, Yingde Greatchem is 1.35 times more volatile than Top Choice Medical. It trades about 0.24 of its potential returns per unit of risk. Top Choice Medical is currently generating about -0.2 per unit of risk. If you would invest 2,168 in Yingde Greatchem Chemicals on November 7, 2024 and sell it today you would earn a total of 157.00 from holding Yingde Greatchem Chemicals or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Top Choice Medical
Performance |
| Timeline |
| Yingde Greatchem Che |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Top Choice Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yingde Greatchem and Top Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Top Choice
The main advantage of trading using opposite Yingde Greatchem and Top Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem position performs unexpectedly, Top Choice 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 Top Choice will offset losses from the drop in Top Choice's long position.The idea behind Yingde Greatchem Chemicals and Top Choice Medical 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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