Correlation Between Zhongzhu Medical and Hubei Forbon
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By analyzing existing cross correlation between Zhongzhu Medical Holdings and Hubei Forbon Technology, you can compare the effects of market volatilities on Zhongzhu Medical and Hubei Forbon 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 Zhongzhu Medical with a short position of Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongzhu Medical and Hubei Forbon.
Diversification Opportunities for Zhongzhu Medical and Hubei Forbon
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongzhu and Hubei is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zhongzhu Medical Holdings and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology and Zhongzhu 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 Zhongzhu Medical Holdings are associated (or correlated) with Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Zhongzhu Medical i.e., Zhongzhu Medical and Hubei Forbon go up and down completely randomly.
Pair Corralation between Zhongzhu Medical and Hubei Forbon
Assuming the 90 days trading horizon Zhongzhu Medical Holdings is expected to under-perform the Hubei Forbon. But the stock apears to be less risky and, when comparing its historical volatility, Zhongzhu Medical Holdings is 1.4 times less risky than Hubei Forbon. The stock trades about -0.03 of its potential returns per unit of risk. The Hubei Forbon Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 774.00 in Hubei Forbon Technology on November 2, 2024 and sell it today you would earn a total of 56.00 from holding Hubei Forbon Technology or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongzhu Medical Holdings vs. Hubei Forbon Technology
Performance |
| Timeline |
| Zhongzhu Medical Holdings |
| Hubei Forbon Technology |
Zhongzhu Medical and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongzhu Medical and Hubei Forbon
The main advantage of trading using opposite Zhongzhu Medical and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongzhu Medical position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.| Zhongzhu Medical vs. CIMC Vehicles Co | Zhongzhu Medical vs. Haima Automobile Group | Zhongzhu Medical vs. Ping An Insurance | Zhongzhu Medical vs. Guangzhou Automobile Group |
| Hubei Forbon vs. Spring Airlines Co | Hubei Forbon vs. Xiandai Investment Co | Hubei Forbon vs. GRIPM Advanced Materials | Hubei Forbon vs. Beijing Mainstreets 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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