Correlation Between China Health and Newron Sport
Can any of the company-specific risk be diversified away by investing in both China Health and Newron Sport 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 Newron Sport 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 Newron Sport, you can compare the effects of market volatilities on China Health and Newron Sport 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 Newron Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Newron Sport.
Diversification Opportunities for China Health and Newron Sport
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Newron is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Newron Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newron Sport 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 Newron Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newron Sport has no effect on the direction of China Health i.e., China Health and Newron Sport go up and down completely randomly.
Pair Corralation between China Health and Newron Sport
Given the investment horizon of 90 days China Health is expected to generate 18.33 times less return on investment than Newron Sport. But when comparing it to its historical volatility, China Health Management is 17.09 times less risky than Newron Sport. It trades about 0.21 of its potential returns per unit of risk. Newron Sport is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Newron Sport on August 25, 2024 and sell it today you would earn a total of 0.01 from holding Newron Sport or generate 100.0% 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. Newron Sport
Performance |
| Timeline |
| China Health Management |
| Newron Sport |
China Health and Newron Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Newron Sport
The main advantage of trading using opposite China Health and Newron Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Newron Sport 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 Newron Sport will offset losses from the drop in Newron Sport's long position.| China Health vs. Boxlight Corp Class | China Health vs. Siyata Mobile | China Health vs. ClearOne | China Health vs. HUMANA INC |
| Newron Sport vs. Absolute Health and | Newron Sport vs. Supurva Healthcare Group | Newron Sport vs. China Health Management | Newron Sport 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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