Correlation Between Commercial Vehicle and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Peijia Medical 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 Commercial Vehicle and Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Peijia Medical Limited, you can compare the effects of market volatilities on Commercial Vehicle and Peijia Medical 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 Commercial Vehicle with a short position of Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Peijia Medical.
Diversification Opportunities for Commercial Vehicle and Peijia Medical
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Commercial and Peijia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Peijia Medical go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Peijia Medical
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Peijia Medical. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Vehicle Group is 1.31 times less risky than Peijia Medical. The stock trades about -0.06 of its potential returns per unit of risk. The Peijia Medical Limited is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Peijia Medical Limited on October 17, 2024 and sell it today you would lose (81.00) from holding Peijia Medical Limited or give up 64.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.81% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Peijia Medical Limited
Performance |
| Timeline |
| Commercial Vehicle |
| Peijia Medical |
Commercial Vehicle and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Peijia Medical
The main advantage of trading using opposite Commercial Vehicle and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| Commercial Vehicle vs. FIRST SHIP LEASE | Commercial Vehicle vs. Forsys Metals Corp | Commercial Vehicle vs. GRENKELEASING Dusseldorf | Commercial Vehicle vs. Globex Mining Enterprises |
| Peijia Medical vs. Geely Automobile Holdings | Peijia Medical vs. FUYO GENERAL LEASE | Peijia Medical vs. Commercial Vehicle Group | Peijia Medical vs. COPLAND ROAD CAPITAL |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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