Correlation Between Pengxin International and Joincare Pharmaceutical
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By analyzing existing cross correlation between Pengxin International Mining and Joincare Pharmaceutical Group, you can compare the effects of market volatilities on Pengxin International and Joincare Pharmaceutical 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 Joincare Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Joincare Pharmaceutical.
Diversification Opportunities for Pengxin International and Joincare Pharmaceutical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pengxin and Joincare is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Joincare Pharmaceutical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joincare Pharmaceutical 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 Joincare Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joincare Pharmaceutical has no effect on the direction of Pengxin International i.e., Pengxin International and Joincare Pharmaceutical go up and down completely randomly.
Pair Corralation between Pengxin International and Joincare Pharmaceutical
Assuming the 90 days trading horizon Pengxin International Mining is expected to under-perform the Joincare Pharmaceutical. In addition to that, Pengxin International is 3.38 times more volatile than Joincare Pharmaceutical Group. It trades about -0.1 of its total potential returns per unit of risk. Joincare Pharmaceutical Group is currently generating about -0.12 per unit of volatility. If you would invest 1,118 in Joincare Pharmaceutical Group on October 24, 2024 and sell it today you would lose (39.00) from holding Joincare Pharmaceutical Group or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Joincare Pharmaceutical Group
Performance |
| Timeline |
| Pengxin International |
| Joincare Pharmaceutical |
Pengxin International and Joincare Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Joincare Pharmaceutical
The main advantage of trading using opposite Pengxin International and Joincare Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Joincare Pharmaceutical 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 Joincare Pharmaceutical will offset losses from the drop in Joincare Pharmaceutical's long position.The idea behind Pengxin International Mining and Joincare Pharmaceutical Group 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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