Correlation Between Meihua International and Nexgel
Can any of the company-specific risk be diversified away by investing in both Meihua International and Nexgel 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 Nexgel 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 Nexgel Inc, you can compare the effects of market volatilities on Meihua International and Nexgel 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 Nexgel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meihua International and Nexgel.
Diversification Opportunities for Meihua International and Nexgel
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meihua and Nexgel is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Meihua International Medical and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc 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 Nexgel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexgel Inc has no effect on the direction of Meihua International i.e., Meihua International and Nexgel go up and down completely randomly.
Pair Corralation between Meihua International and Nexgel
Given the investment horizon of 90 days Meihua International Medical is expected to under-perform the Nexgel. In addition to that, Meihua International is 2.09 times more volatile than Nexgel Inc. It trades about -0.07 of its total potential returns per unit of risk. Nexgel Inc is currently generating about 0.16 per unit of volatility. If you would invest 295.00 in Nexgel Inc on August 27, 2024 and sell it today you would earn a total of 42.00 from holding Nexgel Inc or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meihua International Medical vs. Nexgel Inc
Performance |
| Timeline |
| Meihua International |
| Nexgel Inc |
Meihua International and Nexgel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meihua International and Nexgel
The main advantage of trading using opposite Meihua International and Nexgel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meihua International position performs unexpectedly, Nexgel 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 Nexgel will offset losses from the drop in Nexgel's long position.| Meihua International vs. Heartbeam | Meihua International vs. EUDA Health Holdings | Meihua International vs. Nutex Health | Meihua International vs. Healthcare Triangle |
| Nexgel vs. Heartbeam | Nexgel vs. EUDA Health Holdings | Nexgel vs. Nutex Health | Nexgel 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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