Correlation Between SIMCERE PHARMAC and PEPTONIC MEDICAL
Can any of the company-specific risk be diversified away by investing in both SIMCERE PHARMAC and PEPTONIC MEDICAL 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 SIMCERE PHARMAC and PEPTONIC MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMCERE PHARMAC GRP and PEPTONIC MEDICAL, you can compare the effects of market volatilities on SIMCERE PHARMAC and PEPTONIC MEDICAL 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 SIMCERE PHARMAC with a short position of PEPTONIC MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMCERE PHARMAC and PEPTONIC MEDICAL.
Diversification Opportunities for SIMCERE PHARMAC and PEPTONIC MEDICAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SIMCERE and PEPTONIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SIMCERE PHARMAC GRP and PEPTONIC MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPTONIC MEDICAL and SIMCERE PHARMAC 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 SIMCERE PHARMAC GRP are associated (or correlated) with PEPTONIC MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPTONIC MEDICAL has no effect on the direction of SIMCERE PHARMAC i.e., SIMCERE PHARMAC and PEPTONIC MEDICAL go up and down completely randomly.
Pair Corralation between SIMCERE PHARMAC and PEPTONIC MEDICAL
If you would invest 83.00 in SIMCERE PHARMAC GRP on November 3, 2024 and sell it today you would earn a total of 1.00 from holding SIMCERE PHARMAC GRP or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMCERE PHARMAC GRP vs. PEPTONIC MEDICAL
Performance |
| Timeline |
| SIMCERE PHARMAC GRP |
| PEPTONIC MEDICAL |
SIMCERE PHARMAC and PEPTONIC MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMCERE PHARMAC and PEPTONIC MEDICAL
The main advantage of trading using opposite SIMCERE PHARMAC and PEPTONIC MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMCERE PHARMAC position performs unexpectedly, PEPTONIC MEDICAL 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 PEPTONIC MEDICAL will offset losses from the drop in PEPTONIC MEDICAL's long position.| SIMCERE PHARMAC vs. Canadian Utilities Limited | SIMCERE PHARMAC vs. SIEM OFFSHORE NEW | SIMCERE PHARMAC vs. CarsalesCom | SIMCERE PHARMAC vs. NORTHEAST UTILITIES |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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