Correlation Between Meihua International and Milestone Scientific
Can any of the company-specific risk be diversified away by investing in both Meihua International and Milestone Scientific 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 Milestone Scientific 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 Milestone Scientific, you can compare the effects of market volatilities on Meihua International and Milestone Scientific 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 Milestone Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meihua International and Milestone Scientific.
Diversification Opportunities for Meihua International and Milestone Scientific
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meihua and Milestone is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Meihua International Medical and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific 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 Milestone Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Scientific has no effect on the direction of Meihua International i.e., Meihua International and Milestone Scientific go up and down completely randomly.
Pair Corralation between Meihua International and Milestone Scientific
Given the investment horizon of 90 days Meihua International is expected to generate 9.87 times less return on investment than Milestone Scientific. But when comparing it to its historical volatility, Meihua International Medical is 1.97 times less risky than Milestone Scientific. It trades about 0.06 of its potential returns per unit of risk. Milestone Scientific is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Milestone Scientific on October 20, 2024 and sell it today you would earn a total of 38.00 from holding Milestone Scientific or generate 47.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meihua International Medical vs. Milestone Scientific
Performance |
| Timeline |
| Meihua International |
| Milestone Scientific |
Meihua International and Milestone Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meihua International and Milestone Scientific
The main advantage of trading using opposite Meihua International and Milestone Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meihua International position performs unexpectedly, Milestone Scientific 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 Milestone Scientific will offset losses from the drop in Milestone Scientific's long position.| Meihua International vs. Daxor | Meihua International vs. InfuSystems Holdings | Meihua International vs. Repro Med Systems | Meihua International vs. LeMaitre Vascular |
| Milestone Scientific vs. InfuSystems Holdings | Milestone Scientific vs. STRATA Skin Sciences | Milestone Scientific vs. Retractable Technologies | Milestone Scientific vs. OncoCyte Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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