Correlation Between Cultural Investment and Zhonghong Pulin
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By analyzing existing cross correlation between Cultural Investment Holdings and Zhonghong Pulin Medical, you can compare the effects of market volatilities on Cultural Investment and Zhonghong Pulin 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 Cultural Investment with a short position of Zhonghong Pulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cultural Investment and Zhonghong Pulin.
Diversification Opportunities for Cultural Investment and Zhonghong Pulin
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cultural and Zhonghong is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cultural Investment Holdings and Zhonghong Pulin Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhonghong Pulin Medical and Cultural Investment 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 Cultural Investment Holdings are associated (or correlated) with Zhonghong Pulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhonghong Pulin Medical has no effect on the direction of Cultural Investment i.e., Cultural Investment and Zhonghong Pulin go up and down completely randomly.
Pair Corralation between Cultural Investment and Zhonghong Pulin
Assuming the 90 days trading horizon Cultural Investment Holdings is expected to generate 1.38 times more return on investment than Zhonghong Pulin. However, Cultural Investment is 1.38 times more volatile than Zhonghong Pulin Medical. It trades about -0.01 of its potential returns per unit of risk. Zhonghong Pulin Medical is currently generating about -0.18 per unit of risk. If you would invest 219.00 in Cultural Investment Holdings on October 22, 2024 and sell it today you would lose (2.00) from holding Cultural Investment Holdings or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cultural Investment Holdings vs. Zhonghong Pulin Medical
Performance |
| Timeline |
| Cultural Investment |
| Zhonghong Pulin Medical |
Cultural Investment and Zhonghong Pulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cultural Investment and Zhonghong Pulin
The main advantage of trading using opposite Cultural Investment and Zhonghong Pulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cultural Investment position performs unexpectedly, Zhonghong Pulin 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 Zhonghong Pulin will offset losses from the drop in Zhonghong Pulin's long position.The idea behind Cultural Investment Holdings and Zhonghong Pulin Medical 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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