Correlation Between New China and Lepu Medical
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By analyzing existing cross correlation between New China Life and Lepu Medical Tech, you can compare the effects of market volatilities on New China and Lepu 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 New China with a short position of Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Lepu Medical.
Diversification Opportunities for New China and Lepu Medical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Lepu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Lepu Medical Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepu Medical Tech and New China 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 New China Life are associated (or correlated) with Lepu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepu Medical Tech has no effect on the direction of New China i.e., New China and Lepu Medical go up and down completely randomly.
Pair Corralation between New China and Lepu Medical
Assuming the 90 days trading horizon New China Life is expected to generate 0.92 times more return on investment than Lepu Medical. However, New China Life is 1.08 times less risky than Lepu Medical. It trades about 0.05 of its potential returns per unit of risk. Lepu Medical Tech is currently generating about -0.04 per unit of risk. If you would invest 3,177 in New China Life on September 28, 2024 and sell it today you would earn a total of 1,920 from holding New China Life or generate 60.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
New China Life vs. Lepu Medical Tech
Performance |
| Timeline |
| New China Life |
| Lepu Medical Tech |
New China and Lepu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Lepu Medical
The main advantage of trading using opposite New China and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Lepu 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 Lepu Medical will offset losses from the drop in Lepu Medical's long position.| New China vs. Grandblue Environment Co | New China vs. Shenzhen Centralcon Investment | New China vs. Henan Shuanghui Investment | New China vs. Nuode Investment Co |
| Lepu Medical vs. New China Life | Lepu Medical vs. Ming Yang Smart | Lepu Medical vs. 159681 | Lepu Medical vs. 159005 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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