Correlation Between China Health and Wolters Kluwer
Can any of the company-specific risk be diversified away by investing in both China Health and Wolters Kluwer 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 Wolters Kluwer 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 Wolters Kluwer NV, you can compare the effects of market volatilities on China Health and Wolters Kluwer 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 Wolters Kluwer. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Wolters Kluwer.
Diversification Opportunities for China Health and Wolters Kluwer
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Wolters is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Wolters Kluwer NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolters Kluwer NV 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 Wolters Kluwer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolters Kluwer NV has no effect on the direction of China Health i.e., China Health and Wolters Kluwer go up and down completely randomly.
Pair Corralation between China Health and Wolters Kluwer
Given the investment horizon of 90 days China Health Management is expected to generate 12.48 times more return on investment than Wolters Kluwer. However, China Health is 12.48 times more volatile than Wolters Kluwer NV. It trades about 0.05 of its potential returns per unit of risk. Wolters Kluwer NV is currently generating about 0.09 per unit of risk. If you would invest 1.79 in China Health Management on September 26, 2024 and sell it today you would lose (1.39) from holding China Health Management or give up 77.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Health Management vs. Wolters Kluwer NV
Performance |
| Timeline |
| China Health Management |
| Wolters Kluwer NV |
China Health and Wolters Kluwer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Wolters Kluwer
The main advantage of trading using opposite China Health and Wolters Kluwer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Wolters Kluwer 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 Wolters Kluwer will offset losses from the drop in Wolters Kluwer'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 |
| Wolters Kluwer vs. Absolute Health and | Wolters Kluwer vs. Embrace Change Acquisition | Wolters Kluwer vs. China Health Management | Wolters Kluwer vs. Manaris Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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