Correlation Between Hengkang Medical and Ningbo MedicalSystem
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By analyzing existing cross correlation between Hengkang Medical Group and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Hengkang Medical and Ningbo MedicalSystem 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 Hengkang Medical with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Ningbo MedicalSystem.
Diversification Opportunities for Hengkang Medical and Ningbo MedicalSystem
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengkang and Ningbo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Hengkang 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 Hengkang Medical Group are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Hengkang Medical and Ningbo MedicalSystem
Assuming the 90 days trading horizon Hengkang Medical Group is expected to generate 2.28 times more return on investment than Ningbo MedicalSystem. However, Hengkang Medical is 2.28 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about 0.08 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.14 per unit of risk. If you would invest 260.00 in Hengkang Medical Group on September 26, 2024 and sell it today you would earn a total of 13.00 from holding Hengkang Medical Group or generate 5.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hengkang Medical Group vs. Ningbo MedicalSystem Biotechno
Performance |
Timeline |
Hengkang Medical |
Ningbo MedicalSystem |
Hengkang Medical and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hengkang Medical and Ningbo MedicalSystem
The main advantage of trading using opposite Hengkang Medical and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Ningbo MedicalSystem 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 Ningbo MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.Hengkang Medical vs. Agricultural Bank of | Hengkang Medical vs. Industrial and Commercial | Hengkang Medical vs. Bank of China | Hengkang Medical vs. China Construction Bank |
Ningbo MedicalSystem vs. Industrial and Commercial | Ningbo MedicalSystem vs. Agricultural Bank of | Ningbo MedicalSystem vs. China Construction Bank | Ningbo MedicalSystem vs. Bank of China |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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