Correlation Between Heilongjiang Transport and Allmed Medical
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By analyzing existing cross correlation between Heilongjiang Transport Development and Allmed Medical Products, you can compare the effects of market volatilities on Heilongjiang Transport and Allmed Medical 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 Heilongjiang Transport with a short position of Allmed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Allmed Medical.
Diversification Opportunities for Heilongjiang Transport and Allmed Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heilongjiang and Allmed is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Allmed Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allmed Medical Products and Heilongjiang Transport 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 Heilongjiang Transport Development are associated (or correlated) with Allmed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allmed Medical Products has no effect on the direction of Heilongjiang Transport i.e., Heilongjiang Transport and Allmed Medical go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Allmed Medical
Assuming the 90 days trading horizon Heilongjiang Transport Development is expected to under-perform the Allmed Medical. But the stock apears to be less risky and, when comparing its historical volatility, Heilongjiang Transport Development is 1.4 times less risky than Allmed Medical. The stock trades about -0.16 of its potential returns per unit of risk. The Allmed Medical Products is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 873.00 in Allmed Medical Products on November 1, 2024 and sell it today you would earn a total of 84.00 from holding Allmed Medical Products or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Transport Develop vs. Allmed Medical Products
Performance |
| Timeline |
| Heilongjiang Transport |
| Allmed Medical Products |
Heilongjiang Transport and Allmed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Transport and Allmed Medical
The main advantage of trading using opposite Heilongjiang Transport and Allmed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport position performs unexpectedly, Allmed Medical 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 Allmed Medical will offset losses from the drop in Allmed Medical's long position.The idea behind Heilongjiang Transport Development and Allmed Medical Products 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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