Correlation Between Advanced Medical and CHINA TONTINE
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and CHINA TONTINE 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 Advanced Medical and CHINA TONTINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and CHINA TONTINE WINES, you can compare the effects of market volatilities on Advanced Medical and CHINA TONTINE 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 Advanced Medical with a short position of CHINA TONTINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and CHINA TONTINE.
Diversification Opportunities for Advanced Medical and CHINA TONTINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and CHINA TONTINE WINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA TONTINE WINES and Advanced 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 Advanced Medical Solutions are associated (or correlated) with CHINA TONTINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA TONTINE WINES has no effect on the direction of Advanced Medical i.e., Advanced Medical and CHINA TONTINE go up and down completely randomly.
Pair Corralation between Advanced Medical and CHINA TONTINE
Assuming the 90 days trading horizon Advanced Medical is expected to generate 87.9 times less return on investment than CHINA TONTINE. But when comparing it to its historical volatility, Advanced Medical Solutions is 15.79 times less risky than CHINA TONTINE. It trades about 0.01 of its potential returns per unit of risk. CHINA TONTINE WINES is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.70 in CHINA TONTINE WINES on September 3, 2024 and sell it today you would earn a total of 6.30 from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Advanced Medical Solutions vs. CHINA TONTINE WINES
Performance |
| Timeline |
| Advanced Medical Sol |
| CHINA TONTINE WINES |
Advanced Medical and CHINA TONTINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and CHINA TONTINE
The main advantage of trading using opposite Advanced Medical and CHINA TONTINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, CHINA TONTINE 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 CHINA TONTINE will offset losses from the drop in CHINA TONTINE's long position.| Advanced Medical vs. National Health Investors | Advanced Medical vs. STRAYER EDUCATION | Advanced Medical vs. EHEALTH | Advanced Medical vs. Sabra Health Care |
| CHINA TONTINE vs. Superior Plus Corp | CHINA TONTINE vs. NMI Holdings | CHINA TONTINE vs. Origin Agritech | CHINA TONTINE vs. SIVERS SEMICONDUCTORS AB |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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