Correlation Between APT Medical and Shandong Rike
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By analyzing existing cross correlation between APT Medical and Shandong Rike Chemical, you can compare the effects of market volatilities on APT Medical and Shandong Rike 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 APT Medical with a short position of Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of APT Medical and Shandong Rike.
Diversification Opportunities for APT Medical and Shandong Rike
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between APT and Shandong is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding APT Medical and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical and APT 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 APT Medical are associated (or correlated) with Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of APT Medical i.e., APT Medical and Shandong Rike go up and down completely randomly.
Pair Corralation between APT Medical and Shandong Rike
Assuming the 90 days trading horizon APT Medical is expected to generate 0.63 times more return on investment than Shandong Rike. However, APT Medical is 1.59 times less risky than Shandong Rike. It trades about 0.19 of its potential returns per unit of risk. Shandong Rike Chemical is currently generating about -0.1 per unit of risk. If you would invest 34,608 in APT Medical on November 9, 2024 and sell it today you would earn a total of 2,327 from holding APT Medical or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APT Medical vs. Shandong Rike Chemical
Performance |
| Timeline |
| APT Medical |
Risk-Adjusted Performance
OK
Weak | Strong |
| Shandong Rike Chemical |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
APT Medical and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APT Medical and Shandong Rike
The main advantage of trading using opposite APT Medical and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APT Medical position performs unexpectedly, Shandong Rike 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 Shandong Rike will offset losses from the drop in Shandong Rike's long position.The idea behind APT Medical and Shandong Rike Chemical 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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