Correlation Between Zimmer Biomet and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Zimmer Biomet and Peijia 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 Zimmer Biomet and Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimmer Biomet Holdings and Peijia Medical Limited, you can compare the effects of market volatilities on Zimmer Biomet and Peijia 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 Zimmer Biomet with a short position of Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Biomet and Peijia Medical.
Diversification Opportunities for Zimmer Biomet and Peijia Medical
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zimmer and Peijia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Biomet Holdings and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical and Zimmer Biomet 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 Zimmer Biomet Holdings are associated (or correlated) with Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Zimmer Biomet i.e., Zimmer Biomet and Peijia Medical go up and down completely randomly.
Pair Corralation between Zimmer Biomet and Peijia Medical
Assuming the 90 days horizon Zimmer Biomet Holdings is expected to under-perform the Peijia Medical. But the stock apears to be less risky and, when comparing its historical volatility, Zimmer Biomet Holdings is 2.89 times less risky than Peijia Medical. The stock trades about -0.16 of its potential returns per unit of risk. The Peijia Medical Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Peijia Medical Limited on October 10, 2024 and sell it today you would earn a total of 1.00 from holding Peijia Medical Limited or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zimmer Biomet Holdings vs. Peijia Medical Limited
Performance |
| Timeline |
| Zimmer Biomet Holdings |
| Peijia Medical |
Zimmer Biomet and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimmer Biomet and Peijia Medical
The main advantage of trading using opposite Zimmer Biomet and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimmer Biomet position performs unexpectedly, Peijia 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| Zimmer Biomet vs. Titan Machinery | Zimmer Biomet vs. TITAN MACHINERY | Zimmer Biomet vs. PEPTONIC MEDICAL | Zimmer Biomet vs. SPECTRAL MEDICAL |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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