Correlation Between REMEDY ENTERTAINMENT and Guangzhou Baiyunshan
Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT and Guangzhou Baiyunshan at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining REMEDY ENTERTAINMENT and Guangzhou Baiyunshan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and Guangzhou Baiyunshan Pharmaceutical, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT and Guangzhou Baiyunshan 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 REMEDY ENTERTAINMENT with a short position of Guangzhou Baiyunshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and Guangzhou Baiyunshan.
Diversification Opportunities for REMEDY ENTERTAINMENT and Guangzhou Baiyunshan
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REMEDY and Guangzhou is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and Guangzhou Baiyunshan Pharmaceu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Baiyunshan and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ are associated (or correlated) with Guangzhou Baiyunshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Baiyunshan has no effect on the direction of REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and Guangzhou Baiyunshan go up and down completely randomly.
Pair Corralation between REMEDY ENTERTAINMENT and Guangzhou Baiyunshan
Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to under-perform the Guangzhou Baiyunshan. But the stock apears to be less risky and, when comparing its historical volatility, REMEDY ENTERTAINMENT OYJ is 1.24 times less risky than Guangzhou Baiyunshan. The stock trades about -0.02 of its potential returns per unit of risk. The Guangzhou Baiyunshan Pharmaceutical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 101.00 in Guangzhou Baiyunshan Pharmaceutical on October 25, 2024 and sell it today you would earn a total of 101.00 from holding Guangzhou Baiyunshan Pharmaceutical or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REMEDY ENTERTAINMENT OYJ vs. Guangzhou Baiyunshan Pharmaceu
Performance |
| Timeline |
| REMEDY ENTERTAINMENT OYJ |
| Guangzhou Baiyunshan |
REMEDY ENTERTAINMENT and Guangzhou Baiyunshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REMEDY ENTERTAINMENT and Guangzhou Baiyunshan
The main advantage of trading using opposite REMEDY ENTERTAINMENT and Guangzhou Baiyunshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT position performs unexpectedly, Guangzhou Baiyunshan 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 Guangzhou Baiyunshan will offset losses from the drop in Guangzhou Baiyunshan's long position.| REMEDY ENTERTAINMENT vs. 24SEVENOFFICE GROUP AB | REMEDY ENTERTAINMENT vs. DAIRY FARM INTL | REMEDY ENTERTAINMENT vs. CENTURIA OFFICE REIT | REMEDY ENTERTAINMENT vs. Dairy Farm International |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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