Correlation Between Allgens Medical and Dr Peng
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By analyzing existing cross correlation between Allgens Medical Technology and Dr Peng Telecom, you can compare the effects of market volatilities on Allgens Medical and Dr Peng 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 Allgens Medical with a short position of Dr Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allgens Medical and Dr Peng.
Diversification Opportunities for Allgens Medical and Dr Peng
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allgens and 600804 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Allgens Medical Technology and Dr Peng Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Peng Telecom and Allgens 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 Allgens Medical Technology are associated (or correlated) with Dr Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Peng Telecom has no effect on the direction of Allgens Medical i.e., Allgens Medical and Dr Peng go up and down completely randomly.
Pair Corralation between Allgens Medical and Dr Peng
Assuming the 90 days trading horizon Allgens Medical Technology is expected to generate 0.42 times more return on investment than Dr Peng. However, Allgens Medical Technology is 2.37 times less risky than Dr Peng. It trades about -0.14 of its potential returns per unit of risk. Dr Peng Telecom is currently generating about -0.12 per unit of risk. If you would invest 1,688 in Allgens Medical Technology on November 7, 2024 and sell it today you would lose (57.00) from holding Allgens Medical Technology or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allgens Medical Technology vs. Dr Peng Telecom
Performance |
| Timeline |
| Allgens Medical Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dr Peng Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Allgens Medical and Dr Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allgens Medical and Dr Peng
The main advantage of trading using opposite Allgens Medical and Dr Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allgens Medical position performs unexpectedly, Dr Peng 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 Dr Peng will offset losses from the drop in Dr Peng's long position.The idea behind Allgens Medical Technology and Dr Peng Telecom 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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