Correlation Between Hsinjing Holding and MedFirst Healthcare
Can any of the company-specific risk be diversified away by investing in both Hsinjing Holding and MedFirst Healthcare 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 Hsinjing Holding and MedFirst Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinjing Holding Co and MedFirst Healthcare Services, you can compare the effects of market volatilities on Hsinjing Holding and MedFirst 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 Hsinjing Holding with a short position of MedFirst Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinjing Holding and MedFirst Healthcare.
Diversification Opportunities for Hsinjing Holding and MedFirst Healthcare
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hsinjing and MedFirst is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hsinjing Holding Co and MedFirst Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedFirst Healthcare and Hsinjing Holding 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 Hsinjing Holding Co are associated (or correlated) with MedFirst Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedFirst Healthcare has no effect on the direction of Hsinjing Holding i.e., Hsinjing Holding and MedFirst Healthcare go up and down completely randomly.
Pair Corralation between Hsinjing Holding and MedFirst Healthcare
Assuming the 90 days trading horizon Hsinjing Holding Co is expected to generate 1.89 times more return on investment than MedFirst Healthcare. However, Hsinjing Holding is 1.89 times more volatile than MedFirst Healthcare Services. It trades about -0.06 of its potential returns per unit of risk. MedFirst Healthcare Services is currently generating about -0.41 per unit of risk. If you would invest 2,275 in Hsinjing Holding Co on September 14, 2024 and sell it today you would lose (35.00) from holding Hsinjing Holding Co or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsinjing Holding Co vs. MedFirst Healthcare Services
Performance |
| Timeline |
| Hsinjing Holding |
| MedFirst Healthcare |
Hsinjing Holding and MedFirst Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsinjing Holding and MedFirst Healthcare
The main advantage of trading using opposite Hsinjing Holding and MedFirst Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinjing Holding position performs unexpectedly, MedFirst 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 MedFirst Healthcare will offset losses from the drop in MedFirst Healthcare's long position.| Hsinjing Holding vs. Hannstar Display Corp | Hsinjing Holding vs. Chi Hua Fitness | Hsinjing Holding vs. Pacific Hospital Supply | Hsinjing Holding vs. CHC Healthcare Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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