Correlation Between GKHT Medical and Beijing Wandong
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By analyzing existing cross correlation between GKHT Medical Technology and Beijing Wandong Medical, you can compare the effects of market volatilities on GKHT Medical and Beijing Wandong 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 GKHT Medical with a short position of Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of GKHT Medical and Beijing Wandong.
Diversification Opportunities for GKHT Medical and Beijing Wandong
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GKHT and Beijing is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GKHT Medical Technology and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical and GKHT 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 GKHT Medical Technology are associated (or correlated) with Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of GKHT Medical i.e., GKHT Medical and Beijing Wandong go up and down completely randomly.
Pair Corralation between GKHT Medical and Beijing Wandong
Assuming the 90 days trading horizon GKHT Medical is expected to generate 1.39 times less return on investment than Beijing Wandong. In addition to that, GKHT Medical is 1.25 times more volatile than Beijing Wandong Medical. It trades about 0.13 of its total potential returns per unit of risk. Beijing Wandong Medical is currently generating about 0.22 per unit of volatility. If you would invest 1,250 in Beijing Wandong Medical on August 25, 2024 and sell it today you would earn a total of 422.00 from holding Beijing Wandong Medical or generate 33.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GKHT Medical Technology vs. Beijing Wandong Medical
Performance |
| Timeline |
| GKHT Medical Technology |
| Beijing Wandong Medical |
GKHT Medical and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GKHT Medical and Beijing Wandong
The main advantage of trading using opposite GKHT Medical and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GKHT Medical position performs unexpectedly, Beijing Wandong 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 Beijing Wandong will offset losses from the drop in Beijing Wandong's long position.| GKHT Medical vs. Bank of China | GKHT Medical vs. Kweichow Moutai Co | GKHT Medical vs. PetroChina Co Ltd | GKHT Medical vs. Bank of Communications |
| Beijing Wandong vs. Bank of China | Beijing Wandong vs. Kweichow Moutai Co | Beijing Wandong vs. PetroChina Co Ltd | Beijing Wandong vs. Bank of Communications |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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