Correlation Between China Railway and Allmed Medical
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By analyzing existing cross correlation between China Railway Group and Allmed Medical Products, you can compare the effects of market volatilities on China Railway 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 China Railway with a short position of Allmed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Allmed Medical.
Diversification Opportunities for China Railway and Allmed Medical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Allmed is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group 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 China Railway 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 China Railway Group 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 China Railway i.e., China Railway and Allmed Medical go up and down completely randomly.
Pair Corralation between China Railway and Allmed Medical
Assuming the 90 days trading horizon China Railway Group is expected to under-perform the Allmed Medical. But the stock apears to be less risky and, when comparing its historical volatility, China Railway Group is 1.45 times less risky than Allmed Medical. The stock trades about -0.05 of its potential returns per unit of risk. The Allmed Medical Products is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 872.00 in Allmed Medical Products on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Allmed Medical Products or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Allmed Medical Products
Performance |
| Timeline |
| China Railway Group |
| Allmed Medical Products |
China Railway and Allmed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Allmed Medical
The main advantage of trading using opposite China Railway and Allmed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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.| China Railway vs. Hoshine Silicon Ind | China Railway vs. Glodon Software Co | China Railway vs. Tianjin Ruixin Technology | China Railway vs. Linewell Software Co |
| Allmed Medical vs. Bank of China | Allmed Medical vs. Kweichow Moutai Co | Allmed Medical vs. PetroChina Co Ltd | Allmed Medical vs. Bank of Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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