Correlation Between Astar and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Astar and Peijia Medical 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 Astar and Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Peijia Medical Limited, you can compare the effects of market volatilities on Astar and Peijia Medical 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 Astar with a short position of Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Peijia Medical.
Diversification Opportunities for Astar and Peijia Medical
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astar and Peijia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical and Astar 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 Astar are associated (or correlated) with Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Astar i.e., Astar and Peijia Medical go up and down completely randomly.
Pair Corralation between Astar and Peijia Medical
Assuming the 90 days trading horizon Astar is expected to under-perform the Peijia Medical. In addition to that, Astar is 2.17 times more volatile than Peijia Medical Limited. It trades about -0.15 of its total potential returns per unit of risk. Peijia Medical Limited is currently generating about 0.06 per unit of volatility. If you would invest 46.00 in Peijia Medical Limited on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Peijia Medical Limited or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Astar vs. Peijia Medical Limited
Performance |
| Timeline |
| Astar |
| Peijia Medical |
Astar and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Peijia Medical
The main advantage of trading using opposite Astar and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.The idea behind Astar and Peijia Medical Limited 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.| Peijia Medical vs. Hitachi Construction Machinery | Peijia Medical vs. AGRICULTBK HADR25 YC | Peijia Medical vs. ecotel communication ag | Peijia Medical vs. North American Construction |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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