Correlation Between De Rucci and Zhende Medical

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

By analyzing existing cross correlation between De Rucci Healthy and Zhende Medical Co, you can compare the effects of market volatilities on De Rucci and Zhende 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 De Rucci with a short position of Zhende Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Rucci and Zhende Medical.

Diversification Opportunities for De Rucci and Zhende Medical

0.02

Correlation Coefficient

De Rucci  Zhende Medical

Significant diversification

The 3 months correlation between 001323 and Zhende is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding De Rucci Healthy and Zhende Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhende Medical and De Rucci 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 De Rucci Healthy are associated (or correlated) with Zhende Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhende Medical has no effect on the direction of De Rucci i.e., De Rucci and Zhende Medical go up and down completely randomly.

Pair Corralation between De Rucci and Zhende Medical

Assuming the 90 days trading horizon De Rucci Healthy is expected to under-perform the Zhende Medical. In addition to that, De Rucci is 1.55 times more volatile than Zhende Medical Co. It trades about -0.13 of its total potential returns per unit of risk. Zhende Medical Co is currently generating about -0.04 per unit of volatility. If you would invest  2,240  in Zhende Medical Co on December 30, 2024 and sell it today you would lose (63.00) from holding Zhende Medical Co or give up 2.81% of portfolio value over 90 days.

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

De Rucci Healthy  vs.  Zhende Medical Co

De Rucci Healthy

Risk-Adjusted Performance

Very Weak

Over the last 90 days De Rucci Healthy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Zhende Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zhende Medical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Zhende Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with De Rucci and Zhende Medical

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

The idea behind De Rucci Healthy and Zhende Medical Co 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.