Correlation Between China Health and Gemz Corp
Can any of the company-specific risk be diversified away by investing in both China Health and Gemz Corp 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 Gemz Corp 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 Gemz Corp, you can compare the effects of market volatilities on China Health and Gemz Corp 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 Gemz Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Gemz Corp.
Diversification Opportunities for China Health and Gemz Corp
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Gemz is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Gemz Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemz Corp 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 Gemz Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemz Corp has no effect on the direction of China Health i.e., China Health and Gemz Corp go up and down completely randomly.
Pair Corralation between China Health and Gemz Corp
Given the investment horizon of 90 days China Health is expected to generate 1.75 times less return on investment than Gemz Corp. But when comparing it to its historical volatility, China Health Management is 1.36 times less risky than Gemz Corp. It trades about 0.05 of its potential returns per unit of risk. Gemz Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.19 in Gemz Corp on August 29, 2024 and sell it today you would lose (0.15) from holding Gemz Corp or give up 78.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Management vs. Gemz Corp
Performance |
| Timeline |
| China Health Management |
| Gemz Corp |
China Health and Gemz Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Gemz Corp
The main advantage of trading using opposite China Health and Gemz Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Gemz Corp 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 Gemz Corp will offset losses from the drop in Gemz Corp's long position.| China Health vs. HeartCore Enterprises | China Health vs. Trust Stamp | China Health vs. Quhuo | China Health vs. C3 Ai Inc |
| Gemz Corp vs. Green Planet Bio | Gemz Corp vs. Azure Holding Group | Gemz Corp vs. Four Leaf Acquisition | Gemz Corp vs. Opus Magnum Ameris |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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