Correlation Between Meinian Onehealth and Shenzhen Topway

Can any of the company-specific risk be diversified away by investing in both Meinian Onehealth and Shenzhen Topway 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 Meinian Onehealth and Shenzhen Topway into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meinian Onehealth Healthcare and Shenzhen Topway Video, you can compare the effects of market volatilities on Meinian Onehealth and Shenzhen Topway 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 Meinian Onehealth with a short position of Shenzhen Topway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meinian Onehealth and Shenzhen Topway.

Diversification Opportunities for Meinian Onehealth and Shenzhen Topway

0.75

Correlation Coefficient

Meinian Onehealth  Shenzhen Topway

Poor diversification

The 3 months correlation between Meinian and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Meinian Onehealth Healthcare and Shenzhen Topway Video in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Topway Video and Meinian Onehealth 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 Meinian Onehealth Healthcare are associated (or correlated) with Shenzhen Topway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Topway Video has no effect on the direction of Meinian Onehealth i.e., Meinian Onehealth and Shenzhen Topway go up and down completely randomly.

Pair Corralation between Meinian Onehealth and Shenzhen Topway

Assuming the 90 days trading horizon Meinian Onehealth Healthcare is expected to generate 1.06 times more return on investment than Shenzhen Topway. However, Meinian Onehealth is 1.06 times more volatile than Shenzhen Topway Video. It trades about 0.11 of its potential returns per unit of risk. Shenzhen Topway Video is currently generating about 0.05 per unit of risk. If you would invest  469.00  in Meinian Onehealth Healthcare on December 26, 2024 and sell it today you would earn a total of  108.00  from holding Meinian Onehealth Healthcare or generate 23.03% return on investment over 90 days.

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

Meinian Onehealth Healthcare  vs.  Shenzhen Topway Video

Meinian Onehealth

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Meinian Onehealth Healthcare are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meinian Onehealth sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Topway Video

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Topway Video are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Topway may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Meinian Onehealth and Shenzhen Topway

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

The idea behind Meinian Onehealth Healthcare and Shenzhen Topway Video 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..