Correlation Between China Health and Huaizhong Health
Can any of the company-specific risk be diversified away by investing in both China Health and Huaizhong Health 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 China Health and Huaizhong Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Management and Huaizhong Health Group, you can compare the effects of market volatilities on China Health and Huaizhong Health 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 China Health with a short position of Huaizhong Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Huaizhong Health.
Diversification Opportunities for China Health and Huaizhong Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Huaizhong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Huaizhong Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaizhong Health and China Health 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 China Health Management are associated (or correlated) with Huaizhong Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaizhong Health has no effect on the direction of China Health i.e., China Health and Huaizhong Health go up and down completely randomly.
Pair Corralation between China Health and Huaizhong Health
If you would invest 0.41 in China Health Management on August 31, 2024 and sell it today you would lose (0.01) from holding China Health Management or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Management vs. Huaizhong Health Group
Performance |
| Timeline |
| China Health Management |
| Huaizhong Health |
China Health and Huaizhong Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Huaizhong Health
The main advantage of trading using opposite China Health and Huaizhong Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Huaizhong Health 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 Huaizhong Health will offset losses from the drop in Huaizhong Health's long position.| China Health vs. Absolute Health and | China Health vs. Embrace Change Acquisition | China Health vs. Supurva Healthcare Group | China Health vs. TransAKT |
| Huaizhong Health vs. American Leisure Holdings | Huaizhong Health vs. Supurva Healthcare Group | Huaizhong Health vs. China Health Management | Huaizhong Health vs. Embrace Change Acquisition |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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