Correlation Between Meihua International and Innerscope Advertising
Can any of the company-specific risk be diversified away by investing in both Meihua International and Innerscope Advertising 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 Innerscope Advertising 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 Innerscope Advertising Agency, you can compare the effects of market volatilities on Meihua International and Innerscope Advertising 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 Innerscope Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meihua International and Innerscope Advertising.
Diversification Opportunities for Meihua International and Innerscope Advertising
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meihua and Innerscope is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Meihua International Medical and Innerscope Advertising Agency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innerscope Advertising 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 Innerscope Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innerscope Advertising has no effect on the direction of Meihua International i.e., Meihua International and Innerscope Advertising go up and down completely randomly.
Pair Corralation between Meihua International and Innerscope Advertising
Given the investment horizon of 90 days Meihua International Medical is expected to generate 0.91 times more return on investment than Innerscope Advertising. However, Meihua International Medical is 1.1 times less risky than Innerscope Advertising. It trades about -0.04 of its potential returns per unit of risk. Innerscope Advertising Agency is currently generating about -0.1 per unit of risk. If you would invest 101.00 in Meihua International Medical on August 25, 2024 and sell it today you would lose (29.00) from holding Meihua International Medical or give up 28.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meihua International Medical vs. Innerscope Advertising Agency
Performance |
| Timeline |
| Meihua International |
| Innerscope Advertising |
Meihua International and Innerscope Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meihua International and Innerscope Advertising
The main advantage of trading using opposite Meihua International and Innerscope Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meihua International position performs unexpectedly, Innerscope Advertising 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 Innerscope Advertising will offset losses from the drop in Innerscope Advertising's long position.| Meihua International vs. Heartbeam | Meihua International vs. EUDA Health Holdings | Meihua International vs. Nutex Health | Meihua International vs. Healthcare Triangle |
| Innerscope Advertising vs. CeCors Inc | Innerscope Advertising vs. GlucoTrack | Innerscope Advertising vs. Sharps Technology | Innerscope Advertising vs. Wearable Health Solutions |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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