Correlation Between Wuhan General and LifeMD Preferred
Can any of the company-specific risk be diversified away by investing in both Wuhan General and LifeMD Preferred 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 Wuhan General and LifeMD Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wuhan General Gr and LifeMD Preferred Series, you can compare the effects of market volatilities on Wuhan General and LifeMD Preferred 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 Wuhan General with a short position of LifeMD Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan General and LifeMD Preferred.
Diversification Opportunities for Wuhan General and LifeMD Preferred
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wuhan and LifeMD is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan General Gr and LifeMD Preferred Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeMD Preferred Series and Wuhan General 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 Wuhan General Gr are associated (or correlated) with LifeMD Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeMD Preferred Series has no effect on the direction of Wuhan General i.e., Wuhan General and LifeMD Preferred go up and down completely randomly.
Pair Corralation between Wuhan General and LifeMD Preferred
If you would invest 2,046 in LifeMD Preferred Series on September 1, 2024 and sell it today you would earn a total of 213.00 from holding LifeMD Preferred Series or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Wuhan General Gr vs. LifeMD Preferred Series
Performance |
| Timeline |
| Wuhan General Gr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LifeMD Preferred Series |
Wuhan General and LifeMD Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan General and LifeMD Preferred
The main advantage of trading using opposite Wuhan General and LifeMD Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan General position performs unexpectedly, LifeMD Preferred 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 LifeMD Preferred will offset losses from the drop in LifeMD Preferred's long position.| Wuhan General vs. Biome Grow | Wuhan General vs. Halo Collective | Wuhan General vs. Cannara Biotech | Wuhan General vs. Avicanna |
| LifeMD Preferred vs. Cadiz Depositary Shares | LifeMD Preferred vs. Star Equity Holdings | LifeMD Preferred vs. FAT Brands | LifeMD Preferred vs. Fortress Biotech Pref |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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