Correlation Between Shanghai Material and Meinian Onehealth
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By analyzing existing cross correlation between Shanghai Material Trading and Meinian Onehealth Healthcare, you can compare the effects of market volatilities on Shanghai Material and Meinian Onehealth 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 Shanghai Material with a short position of Meinian Onehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Meinian Onehealth.
Diversification Opportunities for Shanghai Material and Meinian Onehealth
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Meinian is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Meinian Onehealth Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meinian Onehealth and Shanghai Material 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 Shanghai Material Trading are associated (or correlated) with Meinian Onehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meinian Onehealth has no effect on the direction of Shanghai Material i.e., Shanghai Material and Meinian Onehealth go up and down completely randomly.
Pair Corralation between Shanghai Material and Meinian Onehealth
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Meinian Onehealth. In addition to that, Shanghai Material is 1.93 times more volatile than Meinian Onehealth Healthcare. It trades about -0.41 of its total potential returns per unit of risk. Meinian Onehealth Healthcare is currently generating about -0.66 per unit of volatility. If you would invest 527.00 in Meinian Onehealth Healthcare on October 14, 2024 and sell it today you would lose (108.00) from holding Meinian Onehealth Healthcare or give up 20.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Meinian Onehealth Healthcare
Performance |
| Timeline |
| Shanghai Material Trading |
| Meinian Onehealth |
Shanghai Material and Meinian Onehealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Meinian Onehealth
The main advantage of trading using opposite Shanghai Material and Meinian Onehealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Meinian Onehealth 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 Meinian Onehealth will offset losses from the drop in Meinian Onehealth's long position.The idea behind Shanghai Material Trading and Meinian Onehealth Healthcare 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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