Correlation Between WuXi AppTec and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec and FEMALE HEALTH 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 WuXi AppTec and FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi AppTec Co and FEMALE HEALTH, you can compare the effects of market volatilities on WuXi AppTec and FEMALE HEALTH 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 WuXi AppTec with a short position of FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and FEMALE HEALTH.
Diversification Opportunities for WuXi AppTec and FEMALE HEALTH
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between WuXi and FEMALE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH and WuXi AppTec 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 WuXi AppTec Co are associated (or correlated) with FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of WuXi AppTec i.e., WuXi AppTec and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between WuXi AppTec and FEMALE HEALTH
Assuming the 90 days horizon WuXi AppTec Co is expected to generate 1.04 times more return on investment than FEMALE HEALTH. However, WuXi AppTec is 1.04 times more volatile than FEMALE HEALTH. It trades about 0.12 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.02 per unit of risk. If you would invest 670.00 in WuXi AppTec Co on September 12, 2024 and sell it today you would earn a total of 65.00 from holding WuXi AppTec Co or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
WuXi AppTec Co vs. FEMALE HEALTH
Performance |
| Timeline |
| WuXi AppTec |
| FEMALE HEALTH |
WuXi AppTec and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and FEMALE HEALTH
The main advantage of trading using opposite WuXi AppTec and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| WuXi AppTec vs. Ribbon Communications | WuXi AppTec vs. SPARTAN STORES | WuXi AppTec vs. Vastned Retail NV | WuXi AppTec vs. JAPAN TOBACCO UNSPADR12 |
| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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