Correlation Between China Pharma and Guardion Health
Can any of the company-specific risk be diversified away by investing in both China Pharma and Guardion Health 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 Guardion Health 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 Guardion Health Sciences, you can compare the effects of market volatilities on China Pharma and Guardion Health 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 Guardion Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Pharma and Guardion Health.
Diversification Opportunities for China Pharma and Guardion Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Guardion is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding China Pharma Holdings and Guardion Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardion Health 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 Guardion Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardion Health Sciences has no effect on the direction of China Pharma i.e., China Pharma and Guardion Health go up and down completely randomly.
Pair Corralation between China Pharma and Guardion Health
If you would invest 23.00 in China Pharma Holdings on November 4, 2024 and sell it today you would lose (1.00) from holding China Pharma Holdings or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
China Pharma Holdings vs. Guardion Health Sciences
Performance |
| Timeline |
| China Pharma Holdings |
| Guardion Health Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Pharma and Guardion Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Pharma and Guardion Health
The main advantage of trading using opposite China Pharma and Guardion Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Pharma position performs unexpectedly, Guardion Health 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 Guardion Health will offset losses from the drop in Guardion Health's long position.| China Pharma vs. Agilent Technologies | China Pharma vs. Equillium | China Pharma vs. 23Andme Holding Co | China Pharma vs. DiaMedica Therapeutics |
| Guardion Health vs. Biofrontera | Guardion Health vs. Shuttle Pharmaceuticals | Guardion Health vs. Akanda Corp | Guardion Health vs. China Pharma 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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