Correlation Between China Pharma and Alimera Sciences
Can any of the company-specific risk be diversified away by investing in both China Pharma and Alimera Sciences 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 Pharma and Alimera Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Pharma Holdings and Alimera Sciences, you can compare the effects of market volatilities on China Pharma and Alimera Sciences 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 Pharma with a short position of Alimera Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Pharma and Alimera Sciences.
Diversification Opportunities for China Pharma and Alimera Sciences
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Alimera is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding China Pharma Holdings and Alimera Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimera Sciences and China Pharma 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 Pharma Holdings are associated (or correlated) with Alimera Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimera Sciences has no effect on the direction of China Pharma i.e., China Pharma and Alimera Sciences go up and down completely randomly.
Pair Corralation between China Pharma and Alimera Sciences
If you would invest 24.00 in China Pharma Holdings on November 2, 2024 and sell it today you would earn a total of 0.00 from holding China Pharma Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
China Pharma Holdings vs. Alimera Sciences
Performance |
| Timeline |
| China Pharma Holdings |
| Alimera Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Pharma and Alimera Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Pharma and Alimera Sciences
The main advantage of trading using opposite China Pharma and Alimera Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Pharma position performs unexpectedly, Alimera Sciences 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 Alimera Sciences will offset losses from the drop in Alimera Sciences' long position.| China Pharma vs. Universe Pharmaceuticals | China Pharma vs. Sonoma Pharmaceuticals | China Pharma vs. Akanda Corp | China Pharma vs. Halo Collective |
| Alimera Sciences vs. Shuttle Pharmaceuticals | Alimera Sciences vs. Lifecore Biomedical | Alimera Sciences vs. Journey Medical Corp | Alimera Sciences vs. Organogenesis Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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