Correlation Between Peijia Medical and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both Peijia Medical and Fortescue Metals 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 Fortescue Metals 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 Fortescue Metals Group, you can compare the effects of market volatilities on Peijia Medical and Fortescue Metals 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 Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and Fortescue Metals.
Diversification Opportunities for Peijia Medical and Fortescue Metals
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Peijia and Fortescue is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals 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 Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Peijia Medical i.e., Peijia Medical and Fortescue Metals go up and down completely randomly.
Pair Corralation between Peijia Medical and Fortescue Metals
Assuming the 90 days horizon Peijia Medical Limited is expected to under-perform the Fortescue Metals. In addition to that, Peijia Medical is 2.68 times more volatile than Fortescue Metals Group. It trades about -0.03 of its total potential returns per unit of risk. Fortescue Metals Group is currently generating about -0.02 per unit of volatility. If you would invest 1,231 in Fortescue Metals Group on October 17, 2024 and sell it today you would lose (121.00) from holding Fortescue Metals Group or give up 9.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peijia Medical Limited vs. Fortescue Metals Group
Performance |
| Timeline |
| Peijia Medical |
| Fortescue Metals |
Peijia Medical and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and Fortescue Metals
The main advantage of trading using opposite Peijia Medical and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| Peijia Medical vs. Geely Automobile Holdings | Peijia Medical vs. FUYO GENERAL LEASE | Peijia Medical vs. Commercial Vehicle Group | Peijia Medical vs. COPLAND ROAD CAPITAL |
| Fortescue Metals vs. Medical Properties Trust | Fortescue Metals vs. Peijia Medical Limited | Fortescue Metals vs. Wyndham Hotels Resorts | Fortescue Metals vs. Summit Hotel Properties |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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