Correlation Between Peijia Medical and GB Group
Can any of the company-specific risk be diversified away by investing in both Peijia Medical and GB Group 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 Peijia Medical and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peijia Medical Limited and GB Group plc, you can compare the effects of market volatilities on Peijia Medical and GB Group 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 Peijia Medical with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and GB Group.
Diversification Opportunities for Peijia Medical and GB Group
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peijia and 0GB is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and Peijia Medical 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 Peijia Medical Limited are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Peijia Medical i.e., Peijia Medical and GB Group go up and down completely randomly.
Pair Corralation between Peijia Medical and GB Group
Assuming the 90 days horizon Peijia Medical Limited is expected to generate 3.21 times more return on investment than GB Group. However, Peijia Medical is 3.21 times more volatile than GB Group plc. It trades about 0.14 of its potential returns per unit of risk. GB Group plc is currently generating about -0.44 per unit of risk. If you would invest 42.00 in Peijia Medical Limited on December 8, 2024 and sell it today you would earn a total of 6.00 from holding Peijia Medical Limited or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peijia Medical Limited vs. GB Group plc
Performance |
| Timeline |
| Peijia Medical |
| GB Group plc |
Peijia Medical and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and GB Group
The main advantage of trading using opposite Peijia Medical and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.| Peijia Medical vs. INTER CARS SA | ||
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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