Correlation Between MEDICAL FACILITIES and China Resources
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and China Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MEDICAL FACILITIES and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and China Resources Beer, you can compare the effects of market volatilities on MEDICAL FACILITIES and China Resources 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 MEDICAL FACILITIES with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and China Resources.
Diversification Opportunities for MEDICAL FACILITIES and China Resources
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MEDICAL and China is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and China Resources go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and China Resources
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 0.82 times more return on investment than China Resources. However, MEDICAL FACILITIES NEW is 1.22 times less risky than China Resources. It trades about 0.07 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.01 per unit of risk. If you would invest 517.00 in MEDICAL FACILITIES NEW on October 30, 2024 and sell it today you would earn a total of 563.00 from holding MEDICAL FACILITIES NEW or generate 108.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. China Resources Beer
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| China Resources Beer |
MEDICAL FACILITIES and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and China Resources
The main advantage of trading using opposite MEDICAL FACILITIES and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| MEDICAL FACILITIES vs. H2O Retailing | MEDICAL FACILITIES vs. JIAHUA STORES | MEDICAL FACILITIES vs. AEON STORES | MEDICAL FACILITIES vs. SPARTAN STORES |
| China Resources vs. American Public Education | China Resources vs. STRAYER EDUCATION | China Resources vs. EMBARK EDUCATION LTD | China Resources vs. DEVRY EDUCATION GRP |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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