Correlation Between CareRay Digital and Suzhou Mingzhi
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By analyzing existing cross correlation between CareRay Digital Medical and Suzhou Mingzhi Technology, you can compare the effects of market volatilities on CareRay Digital and Suzhou Mingzhi 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 CareRay Digital with a short position of Suzhou Mingzhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareRay Digital and Suzhou Mingzhi.
Diversification Opportunities for CareRay Digital and Suzhou Mingzhi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CareRay and Suzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding CareRay Digital Medical and Suzhou Mingzhi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Mingzhi Technology and CareRay Digital 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 CareRay Digital Medical are associated (or correlated) with Suzhou Mingzhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Mingzhi Technology has no effect on the direction of CareRay Digital i.e., CareRay Digital and Suzhou Mingzhi go up and down completely randomly.
Pair Corralation between CareRay Digital and Suzhou Mingzhi
Assuming the 90 days trading horizon CareRay Digital is expected to generate 1.06 times less return on investment than Suzhou Mingzhi. But when comparing it to its historical volatility, CareRay Digital Medical is 1.07 times less risky than Suzhou Mingzhi. It trades about 0.34 of its potential returns per unit of risk. Suzhou Mingzhi Technology is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,630 in Suzhou Mingzhi Technology on November 8, 2024 and sell it today you would earn a total of 179.00 from holding Suzhou Mingzhi Technology or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CareRay Digital Medical vs. Suzhou Mingzhi Technology
Performance |
| Timeline |
| CareRay Digital Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Suzhou Mingzhi Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareRay Digital and Suzhou Mingzhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareRay Digital and Suzhou Mingzhi
The main advantage of trading using opposite CareRay Digital and Suzhou Mingzhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareRay Digital position performs unexpectedly, Suzhou Mingzhi 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 Suzhou Mingzhi will offset losses from the drop in Suzhou Mingzhi's long position.The idea behind CareRay Digital Medical and Suzhou Mingzhi Technology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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