Correlation Between Ma Kuang and Johnson Health
Can any of the company-specific risk be diversified away by investing in both Ma Kuang and Johnson Health 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 Ma Kuang and Johnson Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ma Kuang Healthcare and Johnson Health Tech, you can compare the effects of market volatilities on Ma Kuang and Johnson Health 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 Ma Kuang with a short position of Johnson Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ma Kuang and Johnson Health.
Diversification Opportunities for Ma Kuang and Johnson Health
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 4139 and Johnson is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ma Kuang Healthcare and Johnson Health Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Health Tech and Ma Kuang 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 Ma Kuang Healthcare are associated (or correlated) with Johnson Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Health Tech has no effect on the direction of Ma Kuang i.e., Ma Kuang and Johnson Health go up and down completely randomly.
Pair Corralation between Ma Kuang and Johnson Health
Assuming the 90 days trading horizon Ma Kuang is expected to generate 7.08 times less return on investment than Johnson Health. But when comparing it to its historical volatility, Ma Kuang Healthcare is 3.49 times less risky than Johnson Health. It trades about 0.03 of its potential returns per unit of risk. Johnson Health Tech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15,150 in Johnson Health Tech on September 1, 2024 and sell it today you would earn a total of 600.00 from holding Johnson Health Tech or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ma Kuang Healthcare vs. Johnson Health Tech
Performance |
| Timeline |
| Ma Kuang Healthcare |
| Johnson Health Tech |
Ma Kuang and Johnson Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ma Kuang and Johnson Health
The main advantage of trading using opposite Ma Kuang and Johnson Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ma Kuang position performs unexpectedly, Johnson Health 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 Johnson Health will offset losses from the drop in Johnson Health's long position.| Ma Kuang vs. YuantaP shares Taiwan Electronics | Ma Kuang vs. YuantaP shares Taiwan Top | Ma Kuang vs. Fubon MSCI Taiwan | Ma Kuang vs. YuantaP shares Taiwan Mid Cap |
| Johnson Health vs. Taiwan Fertilizer Co | Johnson Health vs. Giant Manufacturing Co | Johnson Health vs. Grape King Bio | Johnson Health vs. Rexon Industrial Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |