Correlation Between Grace Therapeutics, and Wuhan General
Can any of the company-specific risk be diversified away by investing in both Grace Therapeutics, and Wuhan General 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 Grace Therapeutics, and Wuhan General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grace Therapeutics, and Wuhan General Gr, you can compare the effects of market volatilities on Grace Therapeutics, and Wuhan General 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 Grace Therapeutics, with a short position of Wuhan General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grace Therapeutics, and Wuhan General.
Diversification Opportunities for Grace Therapeutics, and Wuhan General
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grace and Wuhan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grace Therapeutics, and Wuhan General Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan General Gr and Grace Therapeutics, 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 Grace Therapeutics, are associated (or correlated) with Wuhan General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan General Gr has no effect on the direction of Grace Therapeutics, i.e., Grace Therapeutics, and Wuhan General go up and down completely randomly.
Pair Corralation between Grace Therapeutics, and Wuhan General
Given the investment horizon of 90 days Grace Therapeutics, is expected to generate 41.37 times less return on investment than Wuhan General. But when comparing it to its historical volatility, Grace Therapeutics, is 17.85 times less risky than Wuhan General. It trades about 0.03 of its potential returns per unit of risk. Wuhan General Gr is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Wuhan General Gr on August 24, 2024 and sell it today you would lose (3.96) from holding Wuhan General Gr or give up 99.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Grace Therapeutics, vs. Wuhan General Gr
Performance |
| Timeline |
| Grace Therapeutics, |
| Wuhan General Gr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grace Therapeutics, and Wuhan General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grace Therapeutics, and Wuhan General
The main advantage of trading using opposite Grace Therapeutics, and Wuhan General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grace Therapeutics, position performs unexpectedly, Wuhan General 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 Wuhan General will offset losses from the drop in Wuhan General's long position.| Grace Therapeutics, vs. Chester Mining | Grace Therapeutics, vs. Ecolab Inc | Grace Therapeutics, vs. SFL Corporation | Grace Therapeutics, vs. Inflection Point Acquisition |
| Wuhan General vs. Biome Grow | Wuhan General vs. Halo Collective | Wuhan General vs. Cannara Biotech | Wuhan General vs. Avicanna |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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