Correlation Between Peijia Medical and FARM 51
Can any of the company-specific risk be diversified away by investing in both Peijia Medical and FARM 51 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 FARM 51 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 FARM 51 GROUP, you can compare the effects of market volatilities on Peijia Medical and FARM 51 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 FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and FARM 51.
Diversification Opportunities for Peijia Medical and FARM 51
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Peijia and FARM is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 GROUP 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 FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of Peijia Medical i.e., Peijia Medical and FARM 51 go up and down completely randomly.
Pair Corralation between Peijia Medical and FARM 51
Assuming the 90 days horizon Peijia Medical Limited is expected to generate 1.05 times more return on investment than FARM 51. However, Peijia Medical is 1.05 times more volatile than FARM 51 GROUP. It trades about -0.04 of its potential returns per unit of risk. FARM 51 GROUP is currently generating about -0.24 per unit of risk. If you would invest 47.00 in Peijia Medical Limited on October 13, 2024 and sell it today you would lose (1.00) from holding Peijia Medical Limited or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peijia Medical Limited vs. FARM 51 GROUP
Performance |
| Timeline |
| Peijia Medical |
| FARM 51 GROUP |
Peijia Medical and FARM 51 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and FARM 51
The main advantage of trading using opposite Peijia Medical and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical position performs unexpectedly, FARM 51 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 FARM 51 will offset losses from the drop in FARM 51's long position.| Peijia Medical vs. Boston Scientific | Peijia Medical vs. Zimmer Biomet Holdings | Peijia Medical vs. Align Technology | Peijia Medical vs. Superior Plus Corp |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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