Correlation Between Healthcare and Huagong Tech
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By analyzing existing cross correlation between Healthcare Co and Huagong Tech Co, you can compare the effects of market volatilities on Healthcare and Huagong Tech 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 Healthcare with a short position of Huagong Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and Huagong Tech.
Diversification Opportunities for Healthcare and Huagong Tech
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Healthcare and Huagong is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Co and Huagong Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huagong Tech and Healthcare 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 Healthcare Co are associated (or correlated) with Huagong Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huagong Tech has no effect on the direction of Healthcare i.e., Healthcare and Huagong Tech go up and down completely randomly.
Pair Corralation between Healthcare and Huagong Tech
Assuming the 90 days trading horizon Healthcare Co is expected to under-perform the Huagong Tech. But the stock apears to be less risky and, when comparing its historical volatility, Healthcare Co is 1.45 times less risky than Huagong Tech. The stock trades about -0.04 of its potential returns per unit of risk. The Huagong Tech Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,866 in Huagong Tech Co on October 15, 2024 and sell it today you would earn a total of 1,931 from holding Huagong Tech Co or generate 103.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Co vs. Huagong Tech Co
Performance |
| Timeline |
| Healthcare |
| Huagong Tech |
Healthcare and Huagong Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and Huagong Tech
The main advantage of trading using opposite Healthcare and Huagong Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare position performs unexpectedly, Huagong Tech 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 Huagong Tech will offset losses from the drop in Huagong Tech's long position.| Healthcare vs. Eyebright Medical Technology | Healthcare vs. Holitech Technology Co | Healthcare vs. Porton Fine Chemicals | Healthcare vs. Montage Technology Co |
| Huagong Tech vs. Biwin Storage Technology | Huagong Tech vs. PetroChina Co Ltd | Huagong Tech vs. Industrial and Commercial | Huagong Tech vs. China Construction Bank |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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