Correlation Between Corporate Office and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Wenzhou Kangning 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 Corporate Office and Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Corporate Office and Wenzhou Kangning 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 Corporate Office with a short position of Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Wenzhou Kangning.
Diversification Opportunities for Corporate Office and Wenzhou Kangning
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and Wenzhou is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital and Corporate Office 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 Corporate Office Properties are associated (or correlated) with Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Corporate Office i.e., Corporate Office and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between Corporate Office and Wenzhou Kangning
Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the Wenzhou Kangning. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Office Properties is 1.11 times less risky than Wenzhou Kangning. The stock trades about -0.26 of its potential returns per unit of risk. The Wenzhou Kangning Hospital is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Wenzhou Kangning Hospital on October 12, 2024 and sell it today you would lose (10.00) from holding Wenzhou Kangning Hospital or give up 6.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Corporate Office Properties vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| Corporate Office Pro |
| Wenzhou Kangning Hospital |
Corporate Office and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Wenzhou Kangning
The main advantage of trading using opposite Corporate Office and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| Corporate Office vs. Semiconductor Manufacturing International | Corporate Office vs. NORTHEAST UTILITIES | Corporate Office vs. ELMOS SEMICONDUCTOR | Corporate Office vs. Samsung Electronics Co |
| Wenzhou Kangning vs. Forsys Metals Corp | Wenzhou Kangning vs. Corporate Office Properties | Wenzhou Kangning vs. Harmony Gold Mining | Wenzhou Kangning vs. LANDSEA GREEN MANAGEMENT |
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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