Correlation Between Apple and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both Apple and Wenzhou Kangning 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 Apple and Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Apple and Wenzhou Kangning 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 Apple with a short position of Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Wenzhou Kangning.
Diversification Opportunities for Apple and Wenzhou Kangning
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and Wenzhou is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital and Apple 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 Apple Inc are associated (or correlated) with Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Apple i.e., Apple and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between Apple and Wenzhou Kangning
Assuming the 90 days trading horizon Apple is expected to generate 1.11 times less return on investment than Wenzhou Kangning. But when comparing it to its historical volatility, Apple Inc is 2.02 times less risky than Wenzhou Kangning. It trades about 0.09 of its potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Wenzhou Kangning Hospital on October 14, 2024 and sell it today you would earn a total of 55.00 from holding Wenzhou Kangning Hospital or generate 66.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| Apple Inc |
| Wenzhou Kangning Hospital |
Apple and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Wenzhou Kangning
The main advantage of trading using opposite Apple and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| Apple vs. JD SPORTS FASH | Apple vs. Fukuyama Transporting Co | Apple vs. Transport International Holdings | Apple vs. ADRIATIC METALS LS 013355 |
| Wenzhou Kangning vs. Apple Inc | Wenzhou Kangning vs. Apple Inc | Wenzhou Kangning vs. Apple Inc | Wenzhou Kangning vs. Apple Inc |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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