Correlation Between Sihuan Pharmaceutical and Painreform
Can any of the company-specific risk be diversified away by investing in both Sihuan Pharmaceutical and Painreform 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 Sihuan Pharmaceutical and Painreform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sihuan Pharmaceutical Holdings and Painreform, you can compare the effects of market volatilities on Sihuan Pharmaceutical and Painreform 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 Sihuan Pharmaceutical with a short position of Painreform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sihuan Pharmaceutical and Painreform.
Diversification Opportunities for Sihuan Pharmaceutical and Painreform
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sihuan and Painreform is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sihuan Pharmaceutical Holdings and Painreform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Painreform and Sihuan Pharmaceutical 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 Sihuan Pharmaceutical Holdings are associated (or correlated) with Painreform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Painreform has no effect on the direction of Sihuan Pharmaceutical i.e., Sihuan Pharmaceutical and Painreform go up and down completely randomly.
Pair Corralation between Sihuan Pharmaceutical and Painreform
Assuming the 90 days horizon Sihuan Pharmaceutical Holdings is expected to generate 0.22 times more return on investment than Painreform. However, Sihuan Pharmaceutical Holdings is 4.49 times less risky than Painreform. It trades about 0.02 of its potential returns per unit of risk. Painreform is currently generating about 0.0 per unit of risk. If you would invest 9.60 in Sihuan Pharmaceutical Holdings on August 31, 2024 and sell it today you would lose (0.10) from holding Sihuan Pharmaceutical Holdings or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.5% |
| Values | Daily Returns |
Sihuan Pharmaceutical Holdings vs. Painreform
Performance |
| Timeline |
| Sihuan Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Painreform |
Sihuan Pharmaceutical and Painreform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sihuan Pharmaceutical and Painreform
The main advantage of trading using opposite Sihuan Pharmaceutical and Painreform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sihuan Pharmaceutical position performs unexpectedly, Painreform 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 Painreform will offset losses from the drop in Painreform's long position.| Sihuan Pharmaceutical vs. Procaps Group SA | Sihuan Pharmaceutical vs. Phibro Animal Health | Sihuan Pharmaceutical vs. Cann American Corp | Sihuan Pharmaceutical vs. Shuttle Pharmaceuticals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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