Correlation Between Meihua International and Hear Atlast
Can any of the company-specific risk be diversified away by investing in both Meihua International and Hear Atlast 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 Meihua International and Hear Atlast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meihua International Medical and Hear Atlast Holdings, you can compare the effects of market volatilities on Meihua International and Hear Atlast 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 Meihua International with a short position of Hear Atlast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meihua International and Hear Atlast.
Diversification Opportunities for Meihua International and Hear Atlast
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Meihua and Hear is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Meihua International Medical and Hear Atlast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hear Atlast Holdings and Meihua International 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 Meihua International Medical are associated (or correlated) with Hear Atlast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hear Atlast Holdings has no effect on the direction of Meihua International i.e., Meihua International and Hear Atlast go up and down completely randomly.
Pair Corralation between Meihua International and Hear Atlast
Given the investment horizon of 90 days Meihua International Medical is expected to under-perform the Hear Atlast. But the stock apears to be less risky and, when comparing its historical volatility, Meihua International Medical is 1.71 times less risky than Hear Atlast. The stock trades about -0.04 of its potential returns per unit of risk. The Hear Atlast Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Hear Atlast Holdings on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Hear Atlast Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meihua International Medical vs. Hear Atlast Holdings
Performance |
| Timeline |
| Meihua International |
| Hear Atlast Holdings |
Meihua International and Hear Atlast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meihua International and Hear Atlast
The main advantage of trading using opposite Meihua International and Hear Atlast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meihua International position performs unexpectedly, Hear Atlast 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 Hear Atlast will offset losses from the drop in Hear Atlast's long position.| Meihua International vs. Heartbeam | Meihua International vs. EUDA Health Holdings | Meihua International vs. Nutex Health | Meihua International vs. Healthcare Triangle |
| Hear Atlast vs. Wearable Health Solutions | Hear Atlast vs. BioLife Sciences | Hear Atlast vs. Innerscope Advertising Agency | Hear Atlast vs. GlucoTrack |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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