Correlation Between China Health and Blockchain Industries
Can any of the company-specific risk be diversified away by investing in both China Health and Blockchain Industries 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 Blockchain Industries 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 Blockchain Industries, you can compare the effects of market volatilities on China Health and Blockchain Industries 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 Blockchain Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Blockchain Industries.
Diversification Opportunities for China Health and Blockchain Industries
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Blockchain is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Blockchain Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Industries 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 Blockchain Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Industries has no effect on the direction of China Health i.e., China Health and Blockchain Industries go up and down completely randomly.
Pair Corralation between China Health and Blockchain Industries
Given the investment horizon of 90 days China Health is expected to generate 1.32 times less return on investment than Blockchain Industries. But when comparing it to its historical volatility, China Health Management is 1.1 times less risky than Blockchain Industries. It trades about 0.05 of its potential returns per unit of risk. Blockchain Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Blockchain Industries on October 21, 2024 and sell it today you would lose (4.18) from holding Blockchain Industries or give up 69.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
China Health Management vs. Blockchain Industries
Performance |
| Timeline |
| China Health Management |
| Blockchain Industries |
China Health and Blockchain Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Blockchain Industries
The main advantage of trading using opposite China Health and Blockchain Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Blockchain Industries 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 Blockchain Industries will offset losses from the drop in Blockchain Industries' long position.| China Health vs. Absolute Health and | China Health vs. Embrace Change Acquisition | China Health vs. Supurva Healthcare Group | China Health vs. TransAKT |
| Blockchain Industries vs. Alpha One | Blockchain Industries vs. Manaris Corp | Blockchain Industries vs. C2E Energy | Blockchain Industries vs. Tanke Biosciences |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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