Correlation Between Kontour (Xian) and Dezhan HealthCare
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By analyzing existing cross correlation between Kontour Medical Technology and Dezhan HealthCare Co, you can compare the effects of market volatilities on Kontour (Xian) and Dezhan HealthCare 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 Kontour (Xian) with a short position of Dezhan HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontour (Xian) and Dezhan HealthCare.
Diversification Opportunities for Kontour (Xian) and Dezhan HealthCare
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kontour and Dezhan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kontour Medical Technology and Dezhan HealthCare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dezhan HealthCare and Kontour (Xian) 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 Kontour Medical Technology are associated (or correlated) with Dezhan HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dezhan HealthCare has no effect on the direction of Kontour (Xian) i.e., Kontour (Xian) and Dezhan HealthCare go up and down completely randomly.
Pair Corralation between Kontour (Xian) and Dezhan HealthCare
Assuming the 90 days trading horizon Kontour Medical Technology is expected to generate 0.81 times more return on investment than Dezhan HealthCare. However, Kontour Medical Technology is 1.23 times less risky than Dezhan HealthCare. It trades about 0.2 of its potential returns per unit of risk. Dezhan HealthCare Co is currently generating about -0.05 per unit of risk. If you would invest 2,809 in Kontour Medical Technology on November 7, 2024 and sell it today you would earn a total of 169.00 from holding Kontour Medical Technology or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontour Medical Technology vs. Dezhan HealthCare Co
Performance |
| Timeline |
| Kontour Medical Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Dezhan HealthCare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kontour (Xian) and Dezhan HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontour (Xian) and Dezhan HealthCare
The main advantage of trading using opposite Kontour (Xian) and Dezhan HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontour (Xian) position performs unexpectedly, Dezhan HealthCare 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 Dezhan HealthCare will offset losses from the drop in Dezhan HealthCare's long position.The idea behind Kontour Medical Technology and Dezhan HealthCare Co 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.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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