Correlation Between Zhongzhu Medical and Wuhan Hvsen
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By analyzing existing cross correlation between Zhongzhu Medical Holdings and Wuhan Hvsen Biotechnology, you can compare the effects of market volatilities on Zhongzhu Medical and Wuhan Hvsen 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 Wuhan Hvsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongzhu Medical and Wuhan Hvsen.
Diversification Opportunities for Zhongzhu Medical and Wuhan Hvsen
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongzhu and Wuhan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Zhongzhu Medical Holdings and Wuhan Hvsen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Hvsen Biotechnology 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 Wuhan Hvsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Hvsen Biotechnology has no effect on the direction of Zhongzhu Medical i.e., Zhongzhu Medical and Wuhan Hvsen go up and down completely randomly.
Pair Corralation between Zhongzhu Medical and Wuhan Hvsen
Assuming the 90 days trading horizon Zhongzhu Medical Holdings is expected to under-perform the Wuhan Hvsen. But the stock apears to be less risky and, when comparing its historical volatility, Zhongzhu Medical Holdings is 1.33 times less risky than Wuhan Hvsen. The stock trades about -0.06 of its potential returns per unit of risk. The Wuhan Hvsen Biotechnology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 938.00 in Wuhan Hvsen Biotechnology on November 7, 2024 and sell it today you would earn a total of 99.00 from holding Wuhan Hvsen Biotechnology or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongzhu Medical Holdings vs. Wuhan Hvsen Biotechnology
Performance |
| Timeline |
| Zhongzhu Medical Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wuhan Hvsen Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zhongzhu Medical and Wuhan Hvsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongzhu Medical and Wuhan Hvsen
The main advantage of trading using opposite Zhongzhu Medical and Wuhan Hvsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongzhu Medical position performs unexpectedly, Wuhan Hvsen 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 Wuhan Hvsen will offset losses from the drop in Wuhan Hvsen's long position.The idea behind Zhongzhu Medical Holdings and Wuhan Hvsen Biotechnology 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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