Correlation Between MedFirst Healthcare and Chi Hua
Can any of the company-specific risk be diversified away by investing in both MedFirst Healthcare and Chi Hua 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 MedFirst Healthcare and Chi Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MedFirst Healthcare Services and Chi Hua Fitness, you can compare the effects of market volatilities on MedFirst Healthcare and Chi Hua 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 MedFirst Healthcare with a short position of Chi Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of MedFirst Healthcare and Chi Hua.
Diversification Opportunities for MedFirst Healthcare and Chi Hua
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MedFirst and Chi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding MedFirst Healthcare Services and Chi Hua Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Hua Fitness and MedFirst Healthcare 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 MedFirst Healthcare Services are associated (or correlated) with Chi Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Hua Fitness has no effect on the direction of MedFirst Healthcare i.e., MedFirst Healthcare and Chi Hua go up and down completely randomly.
Pair Corralation between MedFirst Healthcare and Chi Hua
Assuming the 90 days trading horizon MedFirst Healthcare Services is expected to generate 0.49 times more return on investment than Chi Hua. However, MedFirst Healthcare Services is 2.06 times less risky than Chi Hua. It trades about -0.19 of its potential returns per unit of risk. Chi Hua Fitness is currently generating about -0.15 per unit of risk. If you would invest 7,010 in MedFirst Healthcare Services on August 26, 2024 and sell it today you would lose (140.00) from holding MedFirst Healthcare Services or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MedFirst Healthcare Services vs. Chi Hua Fitness
Performance |
| Timeline |
| MedFirst Healthcare |
| Chi Hua Fitness |
MedFirst Healthcare and Chi Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MedFirst Healthcare and Chi Hua
The main advantage of trading using opposite MedFirst Healthcare and Chi Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MedFirst Healthcare position performs unexpectedly, Chi Hua 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 Chi Hua will offset losses from the drop in Chi Hua's long position.| MedFirst Healthcare vs. Goldsun Building Materials | MedFirst Healthcare vs. HiTi Digital | MedFirst Healthcare vs. YuantaP shares Taiwan Top | MedFirst Healthcare vs. YuantaP shares Taiwan Mid Cap |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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