Correlation Between Meta Financial and China Medical
Can any of the company-specific risk be diversified away by investing in both Meta Financial and China 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 Meta Financial and China Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Financial Group and China Medical System, you can compare the effects of market volatilities on Meta Financial and China 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 Meta Financial with a short position of China Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Financial and China Medical.
Diversification Opportunities for Meta Financial and China Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meta and China is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meta Financial Group and China Medical System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Medical System and Meta Financial 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 Meta Financial Group are associated (or correlated) with China Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Medical System has no effect on the direction of Meta Financial i.e., Meta Financial and China Medical go up and down completely randomly.
Pair Corralation between Meta Financial and China Medical
Assuming the 90 days horizon Meta Financial Group is expected to generate 0.88 times more return on investment than China Medical. However, Meta Financial Group is 1.14 times less risky than China Medical. It trades about 0.17 of its potential returns per unit of risk. China Medical System is currently generating about -0.1 per unit of risk. If you would invest 5,796 in Meta Financial Group on November 1, 2024 and sell it today you would earn a total of 1,854 from holding Meta Financial Group or generate 31.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Financial Group vs. China Medical System
Performance |
| Timeline |
| Meta Financial Group |
| China Medical System |
Meta Financial and China Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Financial and China Medical
The main advantage of trading using opposite Meta Financial and China Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Financial position performs unexpectedly, China 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 China Medical will offset losses from the drop in China Medical's long position.| Meta Financial vs. Zurich Insurance Group | Meta Financial vs. Goosehead Insurance | Meta Financial vs. Commercial Vehicle Group | Meta Financial vs. ZURICH INSURANCE GROUP |
| China Medical vs. Acadia Healthcare | China Medical vs. Chesapeake Utilities | China Medical vs. American Eagle Outfitters | China Medical vs. RCI Hospitality 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |