Correlation Between China Pharma and Sohm
Can any of the company-specific risk be diversified away by investing in both China Pharma and Sohm 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 Sohm 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 Sohm Inc, you can compare the effects of market volatilities on China Pharma and Sohm 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 Sohm. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Pharma and Sohm.
Diversification Opportunities for China Pharma and Sohm
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Sohm is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding China Pharma Holdings and Sohm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sohm Inc 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 Sohm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sohm Inc has no effect on the direction of China Pharma i.e., China Pharma and Sohm go up and down completely randomly.
Pair Corralation between China Pharma and Sohm
If you would invest 0.08 in Sohm Inc on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Sohm Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
China Pharma Holdings vs. Sohm Inc
Performance |
| Timeline |
| China Pharma Holdings |
| Sohm Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Pharma and Sohm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Pharma and Sohm
The main advantage of trading using opposite China Pharma and Sohm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Pharma position performs unexpectedly, Sohm 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 Sohm will offset losses from the drop in Sohm's long position.| China Pharma vs. Universe Pharmaceuticals | China Pharma vs. Sonoma Pharmaceuticals | China Pharma vs. Akanda Corp | China Pharma vs. Halo Collective |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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