Correlation Between JIN MEDICAL and Meihua International
Can any of the company-specific risk be diversified away by investing in both JIN MEDICAL and Meihua International 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 JIN MEDICAL and Meihua International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIN MEDICAL INTERNATIONAL and Meihua International Medical, you can compare the effects of market volatilities on JIN MEDICAL and Meihua International 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 JIN MEDICAL with a short position of Meihua International. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIN MEDICAL and Meihua International.
Diversification Opportunities for JIN MEDICAL and Meihua International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JIN and Meihua is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding JIN MEDICAL INTERNATIONAL and Meihua International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meihua International and JIN MEDICAL 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 JIN MEDICAL INTERNATIONAL are associated (or correlated) with Meihua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meihua International has no effect on the direction of JIN MEDICAL i.e., JIN MEDICAL and Meihua International go up and down completely randomly.
Pair Corralation between JIN MEDICAL and Meihua International
Given the investment horizon of 90 days JIN MEDICAL INTERNATIONAL is expected to under-perform the Meihua International. But the stock apears to be less risky and, when comparing its historical volatility, JIN MEDICAL INTERNATIONAL is 1.62 times less risky than Meihua International. The stock trades about -0.6 of its potential returns per unit of risk. The Meihua International Medical is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Meihua International Medical on August 27, 2024 and sell it today you would lose (16.00) from holding Meihua International Medical or give up 21.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JIN MEDICAL INTERNATIONAL vs. Meihua International Medical
Performance |
| Timeline |
| JIN MEDICAL INTERNATIONAL |
| Meihua International |
JIN MEDICAL and Meihua International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIN MEDICAL and Meihua International
The main advantage of trading using opposite JIN MEDICAL and Meihua International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIN MEDICAL position performs unexpectedly, Meihua International 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 Meihua International will offset losses from the drop in Meihua International's long position.| JIN MEDICAL vs. Heartbeam | JIN MEDICAL vs. EUDA Health Holdings | JIN MEDICAL vs. Nutex Health | JIN MEDICAL vs. Healthcare Triangle |
| Meihua International vs. Heartbeam | Meihua International vs. EUDA Health Holdings | Meihua International vs. Nutex Health | Meihua International vs. Healthcare Triangle |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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