Correlation Between Cowealth Medical and Ningxia Building
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By analyzing existing cross correlation between Cowealth Medical China and Ningxia Building Materials, you can compare the effects of market volatilities on Cowealth Medical and Ningxia Building 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 Cowealth Medical with a short position of Ningxia Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cowealth Medical and Ningxia Building.
Diversification Opportunities for Cowealth Medical and Ningxia Building
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cowealth and Ningxia is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cowealth Medical China and Ningxia Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Building Mat and Cowealth Medical 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 Cowealth Medical China are associated (or correlated) with Ningxia Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Building Mat has no effect on the direction of Cowealth Medical i.e., Cowealth Medical and Ningxia Building go up and down completely randomly.
Pair Corralation between Cowealth Medical and Ningxia Building
Assuming the 90 days trading horizon Cowealth Medical China is expected to under-perform the Ningxia Building. In addition to that, Cowealth Medical is 1.35 times more volatile than Ningxia Building Materials. It trades about -0.05 of its total potential returns per unit of risk. Ningxia Building Materials is currently generating about 0.07 per unit of volatility. If you would invest 1,457 in Ningxia Building Materials on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Ningxia Building Materials or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cowealth Medical China vs. Ningxia Building Materials
Performance |
| Timeline |
| Cowealth Medical China |
| Ningxia Building Mat |
Cowealth Medical and Ningxia Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cowealth Medical and Ningxia Building
The main advantage of trading using opposite Cowealth Medical and Ningxia Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cowealth Medical position performs unexpectedly, Ningxia Building 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 Ningxia Building will offset losses from the drop in Ningxia Building's long position.The idea behind Cowealth Medical China and Ningxia Building Materials 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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