Correlation Between China Health and LiveChain
Can any of the company-specific risk be diversified away by investing in both China Health and LiveChain 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 LiveChain 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 LiveChain, you can compare the effects of market volatilities on China Health and LiveChain 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 LiveChain. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and LiveChain.
Diversification Opportunities for China Health and LiveChain
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and LiveChain is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and LiveChain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveChain 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 LiveChain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveChain has no effect on the direction of China Health i.e., China Health and LiveChain go up and down completely randomly.
Pair Corralation between China Health and LiveChain
Given the investment horizon of 90 days China Health is expected to generate 3.86 times less return on investment than LiveChain. But when comparing it to its historical volatility, China Health Management is 2.1 times less risky than LiveChain. It trades about 0.05 of its potential returns per unit of risk. LiveChain is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.45 in LiveChain on September 3, 2024 and sell it today you would lose (2.21) from holding LiveChain or give up 90.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Health Management vs. LiveChain
Performance |
| Timeline |
| China Health Management |
| LiveChain |
China Health and LiveChain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and LiveChain
The main advantage of trading using opposite China Health and LiveChain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, LiveChain 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 LiveChain will offset losses from the drop in LiveChain'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 |
| LiveChain vs. Manaris Corp | LiveChain vs. Green Planet Bio | LiveChain vs. Continental Beverage Brands | LiveChain 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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