Correlation Between China Health and Premier Products
Can any of the company-specific risk be diversified away by investing in both China Health and Premier Products 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 Premier Products 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 Premier Products Group, you can compare the effects of market volatilities on China Health and Premier Products 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 Premier Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Premier Products.
Diversification Opportunities for China Health and Premier Products
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Premier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Premier Products Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Products 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 Premier Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Products has no effect on the direction of China Health i.e., China Health and Premier Products go up and down completely randomly.
Pair Corralation between China Health and Premier Products
Given the investment horizon of 90 days China Health is expected to generate 1.04 times less return on investment than Premier Products. But when comparing it to its historical volatility, China Health Management is 1.11 times less risky than Premier Products. It trades about 0.06 of its potential returns per unit of risk. Premier Products Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Premier Products Group on August 26, 2024 and sell it today you would lose (0.01) from holding Premier Products Group or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Health Management vs. Premier Products Group
Performance |
| Timeline |
| China Health Management |
| Premier Products |
China Health and Premier Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Premier Products
The main advantage of trading using opposite China Health and Premier Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Premier Products 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 Premier Products will offset losses from the drop in Premier Products' long position.| China Health vs. Boxlight Corp Class | China Health vs. Siyata Mobile | China Health vs. ClearOne | China Health vs. HUMANA INC |
| Premier Products vs. Absolute Health and | Premier Products vs. China Health Management | Premier Products vs. Embrace Change Acquisition | Premier Products vs. TransAKT |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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