Correlation Between Industrial and Huadong Medicine
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By analyzing existing cross correlation between Industrial and Commercial and Huadong Medicine Co, you can compare the effects of market volatilities on Industrial and Huadong Medicine 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 Industrial with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Huadong Medicine.
Diversification Opportunities for Industrial and Huadong Medicine
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrial and Huadong is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Industrial 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 Industrial and Commercial are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Industrial i.e., Industrial and Huadong Medicine go up and down completely randomly.
Pair Corralation between Industrial and Huadong Medicine
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.62 times more return on investment than Huadong Medicine. However, Industrial and Commercial is 1.62 times less risky than Huadong Medicine. It trades about 0.04 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of risk. If you would invest 647.00 in Industrial and Commercial on October 14, 2024 and sell it today you would earn a total of 20.00 from holding Industrial and Commercial or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Huadong Medicine Co
Performance |
| Timeline |
| Industrial and Commercial |
| Huadong Medicine |
Industrial and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Huadong Medicine
The main advantage of trading using opposite Industrial and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Industrial vs. Huizhou Speed Wireless | Industrial vs. Winner Medical Co | Industrial vs. Quectel Wireless Solutions | Industrial vs. Kontour Medical Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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