Correlation Between Zhejiang Qianjiang and APT Medical

Can any of the company-specific risk be diversified away by investing in both Zhejiang Qianjiang and APT 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 Zhejiang Qianjiang and APT Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and APT Medical, you can compare the effects of market volatilities on Zhejiang Qianjiang and APT 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 Zhejiang Qianjiang with a short position of APT Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and APT Medical.

Diversification Opportunities for Zhejiang Qianjiang and APT Medical

0.21

Correlation Coefficient

Zhejiang Qianjiang  APT Medical

Modest diversification

The 3 months correlation between Zhejiang and APT is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and APT Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APT Medical and Zhejiang Qianjiang 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 Zhejiang Qianjiang Motorcycle are associated (or correlated) with APT Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APT Medical has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and APT Medical go up and down completely randomly.

Pair Corralation between Zhejiang Qianjiang and APT Medical

Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to generate 1.24 times more return on investment than APT Medical. However, Zhejiang Qianjiang is 1.24 times more volatile than APT Medical. It trades about 0.17 of its potential returns per unit of risk. APT Medical is currently generating about 0.05 per unit of risk. If you would invest  1,662  in Zhejiang Qianjiang Motorcycle on September 25, 2024 and sell it today you would earn a total of  153.00  from holding Zhejiang Qianjiang Motorcycle or generate 9.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Zhejiang Qianjiang Motorcycle  vs.  APT Medical

Zhejiang Qianjiang

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang Qianjiang Motorcycle are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang Qianjiang sustained solid returns over the last few months and may actually be approaching a breakup point.

APT Medical

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in APT Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, APT Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhejiang Qianjiang and APT Medical

The main advantage of trading using opposite Zhejiang Qianjiang and APT Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, APT 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 APT Medical will offset losses from the drop in APT Medical's long position.

The idea behind Zhejiang Qianjiang Motorcycle and APT Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.