Correlation Between China Health and Global Blockchain
Can any of the company-specific risk be diversified away by investing in both China Health and Global Blockchain 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 Global Blockchain 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 Global Blockchain Acquisition, you can compare the effects of market volatilities on China Health and Global Blockchain 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 Global Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Global Blockchain.
Diversification Opportunities for China Health and Global Blockchain
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Global is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Global Blockchain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blockchain 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 Global Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blockchain has no effect on the direction of China Health i.e., China Health and Global Blockchain go up and down completely randomly.
Pair Corralation between China Health and Global Blockchain
Given the investment horizon of 90 days China Health Management is expected to generate 6.51 times more return on investment than Global Blockchain. However, China Health is 6.51 times more volatile than Global Blockchain Acquisition. It trades about 0.21 of its potential returns per unit of risk. Global Blockchain Acquisition is currently generating about 0.06 per unit of risk. If you would invest 0.55 in China Health Management on August 26, 2024 and sell it today you would earn a total of 0.06 from holding China Health Management or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Management vs. Global Blockchain Acquisition
Performance |
| Timeline |
| China Health Management |
| Global Blockchain |
China Health and Global Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Global Blockchain
The main advantage of trading using opposite China Health and Global Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Global Blockchain 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 Global Blockchain will offset losses from the drop in Global Blockchain's long position.| China Health vs. Boxlight Corp Class | China Health vs. Siyata Mobile | China Health vs. ClearOne | China Health vs. HUMANA INC |
| Global Blockchain vs. Embrace Change Acquisition | Global Blockchain vs. Bannix Acquisition Corp | Global Blockchain vs. TransAKT | Global Blockchain vs. China Health Management |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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