Correlation Between HANSOH PHARMAC and Guangzhou Baiyunshan
Can any of the company-specific risk be diversified away by investing in both HANSOH PHARMAC and Guangzhou Baiyunshan 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 HANSOH PHARMAC and Guangzhou Baiyunshan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANSOH PHARMAC HD 00001 and Guangzhou Baiyunshan Pharmaceutical, you can compare the effects of market volatilities on HANSOH PHARMAC and Guangzhou Baiyunshan 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 HANSOH PHARMAC with a short position of Guangzhou Baiyunshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANSOH PHARMAC and Guangzhou Baiyunshan.
Diversification Opportunities for HANSOH PHARMAC and Guangzhou Baiyunshan
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HANSOH and Guangzhou is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding HANSOH PHARMAC HD 00001 and Guangzhou Baiyunshan Pharmaceu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Baiyunshan and HANSOH PHARMAC 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 HANSOH PHARMAC HD 00001 are associated (or correlated) with Guangzhou Baiyunshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Baiyunshan has no effect on the direction of HANSOH PHARMAC i.e., HANSOH PHARMAC and Guangzhou Baiyunshan go up and down completely randomly.
Pair Corralation between HANSOH PHARMAC and Guangzhou Baiyunshan
Assuming the 90 days horizon HANSOH PHARMAC is expected to generate 1.02 times less return on investment than Guangzhou Baiyunshan. In addition to that, HANSOH PHARMAC is 1.06 times more volatile than Guangzhou Baiyunshan Pharmaceutical. It trades about 0.06 of its total potential returns per unit of risk. Guangzhou Baiyunshan Pharmaceutical is currently generating about 0.07 per unit of volatility. If you would invest 131.00 in Guangzhou Baiyunshan Pharmaceutical on September 25, 2024 and sell it today you would earn a total of 81.00 from holding Guangzhou Baiyunshan Pharmaceutical or generate 61.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANSOH PHARMAC HD 00001 vs. Guangzhou Baiyunshan Pharmaceu
Performance |
| Timeline |
| HANSOH PHARMAC HD |
| Guangzhou Baiyunshan |
HANSOH PHARMAC and Guangzhou Baiyunshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANSOH PHARMAC and Guangzhou Baiyunshan
The main advantage of trading using opposite HANSOH PHARMAC and Guangzhou Baiyunshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANSOH PHARMAC position performs unexpectedly, Guangzhou Baiyunshan 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 Guangzhou Baiyunshan will offset losses from the drop in Guangzhou Baiyunshan's long position.| HANSOH PHARMAC vs. Merck Company | HANSOH PHARMAC vs. Takeda Pharmaceutical | HANSOH PHARMAC vs. Guangzhou Baiyunshan Pharmaceutical | HANSOH PHARMAC vs. Elanco Animal Health |
| Guangzhou Baiyunshan vs. Merck Company | Guangzhou Baiyunshan vs. Takeda Pharmaceutical | Guangzhou Baiyunshan vs. HANSOH PHARMAC HD 00001 | Guangzhou Baiyunshan vs. Elanco Animal Health |
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 CEOs Directory module to screen CEOs from public companies around the world.
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