Correlation Between Beijing Kaiwen and Winner Medical

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

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

Diversification Opportunities for Beijing Kaiwen and Winner Medical

0.21

Correlation Coefficient

Beijing Kaiwen  Winner Medical

Modest diversification

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

Pair Corralation between Beijing Kaiwen and Winner Medical

Assuming the 90 days trading horizon Beijing Kaiwen Education is expected to under-perform the Winner Medical. In addition to that, Beijing Kaiwen is 1.16 times more volatile than Winner Medical Co. It trades about -0.06 of its total potential returns per unit of risk. Winner Medical Co is currently generating about 0.05 per unit of volatility. If you would invest  3,698  in Winner Medical Co on October 8, 2024 and sell it today you would earn a total of  251.00  from holding Winner Medical Co or generate 6.79% return on investment over 90 days.

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

Beijing Kaiwen Education  vs.  Winner Medical Co

Beijing Kaiwen Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beijing Kaiwen Education 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Winner Medical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Winner Medical Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winner Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Beijing Kaiwen and Winner Medical

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

The idea behind Beijing Kaiwen Education and Winner 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.