Correlation Between Prestige Consumer and Sinopharm Group
Can any of the company-specific risk be diversified away by investing in both Prestige Consumer and Sinopharm Group 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 Prestige Consumer and Sinopharm Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prestige Consumer Healthcare and Sinopharm Group Co, you can compare the effects of market volatilities on Prestige Consumer and Sinopharm Group 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 Prestige Consumer with a short position of Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prestige Consumer and Sinopharm Group.
Diversification Opportunities for Prestige Consumer and Sinopharm Group
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Prestige and Sinopharm is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Consumer Healthcare and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group and Prestige Consumer 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 Prestige Consumer Healthcare are associated (or correlated) with Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of Prestige Consumer i.e., Prestige Consumer and Sinopharm Group go up and down completely randomly.
Pair Corralation between Prestige Consumer and Sinopharm Group
Assuming the 90 days horizon Prestige Consumer Healthcare is expected to generate 0.95 times more return on investment than Sinopharm Group. However, Prestige Consumer Healthcare is 1.06 times less risky than Sinopharm Group. It trades about 0.35 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.14 per unit of risk. If you would invest 6,700 in Prestige Consumer Healthcare on September 3, 2024 and sell it today you would earn a total of 1,150 from holding Prestige Consumer Healthcare or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prestige Consumer Healthcare vs. Sinopharm Group Co
Performance |
| Timeline |
| Prestige Consumer |
| Sinopharm Group |
Prestige Consumer and Sinopharm Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prestige Consumer and Sinopharm Group
The main advantage of trading using opposite Prestige Consumer and Sinopharm Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Consumer position performs unexpectedly, Sinopharm Group 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 Sinopharm Group will offset losses from the drop in Sinopharm Group's long position.| Prestige Consumer vs. MARKET VECTR RETAIL | Prestige Consumer vs. Virtus Investment Partners | Prestige Consumer vs. Auto Trader Group | Prestige Consumer vs. FLOW TRADERS LTD |
| Sinopharm Group vs. AmerisourceBergen | Sinopharm Group vs. Superior Plus Corp | Sinopharm Group vs. NMI Holdings | Sinopharm Group vs. Origin Agritech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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