Correlation Between ResMed and Shandong Weigao
Can any of the company-specific risk be diversified away by investing in both ResMed and Shandong Weigao 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 ResMed and Shandong Weigao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Shandong Weigao Group, you can compare the effects of market volatilities on ResMed and Shandong Weigao 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 ResMed with a short position of Shandong Weigao. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Shandong Weigao.
Diversification Opportunities for ResMed and Shandong Weigao
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ResMed and Shandong is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Shandong Weigao Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Weigao Group and ResMed 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 ResMed Inc are associated (or correlated) with Shandong Weigao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Weigao Group has no effect on the direction of ResMed i.e., ResMed and Shandong Weigao go up and down completely randomly.
Pair Corralation between ResMed and Shandong Weigao
Considering the 90-day investment horizon ResMed Inc is expected to generate 0.32 times more return on investment than Shandong Weigao. However, ResMed Inc is 3.15 times less risky than Shandong Weigao. It trades about 0.07 of its potential returns per unit of risk. Shandong Weigao Group is currently generating about -0.12 per unit of risk. If you would invest 24,375 in ResMed Inc on September 2, 2024 and sell it today you would earn a total of 527.00 from holding ResMed Inc or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ResMed Inc vs. Shandong Weigao Group
Performance |
| Timeline |
| ResMed Inc |
| Shandong Weigao Group |
ResMed and Shandong Weigao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ResMed and Shandong Weigao
The main advantage of trading using opposite ResMed and Shandong Weigao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, Shandong Weigao 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 Shandong Weigao will offset losses from the drop in Shandong Weigao's long position.| ResMed vs. Teleflex Incorporated | ResMed vs. West Pharmaceutical Services | ResMed vs. Alcon AG | ResMed vs. ICU Medical |
| Shandong Weigao vs. Ansell Limited | Shandong Weigao vs. Straumann Holding AG | Shandong Weigao vs. Utah Medical Products | Shandong Weigao vs. AngioDynamics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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