Correlation Between Pengxin International and Innovative Medical
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By analyzing existing cross correlation between Pengxin International Mining and Innovative Medical Management, you can compare the effects of market volatilities on Pengxin International and Innovative Medical 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 Pengxin International with a short position of Innovative Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Innovative Medical.
Diversification Opportunities for Pengxin International and Innovative Medical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pengxin and Innovative is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Innovative Medical Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Medical and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Innovative Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Medical has no effect on the direction of Pengxin International i.e., Pengxin International and Innovative Medical go up and down completely randomly.
Pair Corralation between Pengxin International and Innovative Medical
Assuming the 90 days trading horizon Pengxin International Mining is expected to under-perform the Innovative Medical. But the stock apears to be less risky and, when comparing its historical volatility, Pengxin International Mining is 1.45 times less risky than Innovative Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Innovative Medical Management is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Innovative Medical Management on September 2, 2024 and sell it today you would lose (6.00) from holding Innovative Medical Management or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Innovative Medical Management
Performance |
| Timeline |
| Pengxin International |
| Innovative Medical |
Pengxin International and Innovative Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Innovative Medical
The main advantage of trading using opposite Pengxin International and Innovative Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Innovative Medical 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 Innovative Medical will offset losses from the drop in Innovative Medical's long position.The idea behind Pengxin International Mining and Innovative Medical Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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