Correlation Between Healthcare Triangle and Meihua International
Can any of the company-specific risk be diversified away by investing in both Healthcare Triangle and Meihua International 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 Healthcare Triangle and Meihua International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Triangle and Meihua International Medical, you can compare the effects of market volatilities on Healthcare Triangle and Meihua International 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 Healthcare Triangle with a short position of Meihua International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Triangle and Meihua International.
Diversification Opportunities for Healthcare Triangle and Meihua International
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Healthcare and Meihua is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Triangle and Meihua International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meihua International and Healthcare Triangle 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 Healthcare Triangle are associated (or correlated) with Meihua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meihua International has no effect on the direction of Healthcare Triangle i.e., Healthcare Triangle and Meihua International go up and down completely randomly.
Pair Corralation between Healthcare Triangle and Meihua International
Given the investment horizon of 90 days Healthcare Triangle is expected to generate 2.99 times more return on investment than Meihua International. However, Healthcare Triangle is 2.99 times more volatile than Meihua International Medical. It trades about 0.19 of its potential returns per unit of risk. Meihua International Medical is currently generating about 0.07 per unit of risk. If you would invest 54.00 in Healthcare Triangle on August 25, 2024 and sell it today you would earn a total of 55.00 from holding Healthcare Triangle or generate 101.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Triangle vs. Meihua International Medical
Performance |
| Timeline |
| Healthcare Triangle |
| Meihua International |
Healthcare Triangle and Meihua International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Triangle and Meihua International
The main advantage of trading using opposite Healthcare Triangle and Meihua International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Triangle position performs unexpectedly, Meihua International 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 Meihua International will offset losses from the drop in Meihua International's long position.| Healthcare Triangle vs. Bullfrog AI Holdings, | Healthcare Triangle vs. EUDA Health Holdings | Healthcare Triangle vs. Mangoceuticals, Common Stock | Healthcare Triangle vs. FOXO Technologies |
| Meihua International vs. Heartbeam | Meihua International vs. EUDA Health Holdings | Meihua International vs. Nutex Health | Meihua International vs. Healthcare Triangle |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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