Correlation Between Dong Yi and Allgens Medical

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

By analyzing existing cross correlation between Dong Yi Ri and Allgens Medical Technology, you can compare the effects of market volatilities on Dong Yi and Allgens 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 Dong Yi with a short position of Allgens Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong Yi and Allgens Medical.

Diversification Opportunities for Dong Yi and Allgens Medical

0.24

Correlation Coefficient

Dong Yi  Allgens Medical

Modest diversification

The 3 months correlation between Dong and Allgens is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dong Yi Ri and Allgens Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allgens Medical Tech and Dong Yi 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 Dong Yi Ri are associated (or correlated) with Allgens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allgens Medical Tech has no effect on the direction of Dong Yi i.e., Dong Yi and Allgens Medical go up and down completely randomly.

Pair Corralation between Dong Yi and Allgens Medical

Assuming the 90 days trading horizon Dong Yi Ri is expected to generate 2.91 times more return on investment than Allgens Medical. However, Dong Yi is 2.91 times more volatile than Allgens Medical Technology. It trades about 0.15 of its potential returns per unit of risk. Allgens Medical Technology is currently generating about -0.13 per unit of risk. If you would invest  442.00  in Dong Yi Ri on December 25, 2024 and sell it today you would earn a total of  193.00  from holding Dong Yi Ri or generate 43.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Dong Yi Ri  vs.  Allgens Medical Technology

Dong Yi Ri

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dong Yi Ri are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dong Yi sustained solid returns over the last few months and may actually be approaching a breakup point.

Allgens Medical Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allgens Medical Technology 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.

Pair Trading with Dong Yi and Allgens Medical

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

The idea behind Dong Yi Ri and Allgens Medical Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.