Correlation Between Impulse Qingdao and PKU HealthCare

Can any of the company-specific risk be diversified away by investing in both Impulse Qingdao and PKU HealthCare 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 Impulse Qingdao and PKU HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Impulse Qingdao Health and PKU HealthCare Corp, you can compare the effects of market volatilities on Impulse Qingdao and PKU HealthCare 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 Impulse Qingdao with a short position of PKU HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impulse Qingdao and PKU HealthCare.

Diversification Opportunities for Impulse Qingdao and PKU HealthCare

-0.38

Correlation Coefficient

Impulse Qingdao  PKU HealthCare

Very good diversification

The 3 months correlation between Impulse and PKU is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Impulse Qingdao Health and PKU HealthCare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKU HealthCare Corp and Impulse Qingdao 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 Impulse Qingdao Health are associated (or correlated) with PKU HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKU HealthCare Corp has no effect on the direction of Impulse Qingdao i.e., Impulse Qingdao and PKU HealthCare go up and down completely randomly.

Pair Corralation between Impulse Qingdao and PKU HealthCare

Assuming the 90 days trading horizon Impulse Qingdao Health is expected to generate 1.4 times more return on investment than PKU HealthCare. However, Impulse Qingdao is 1.4 times more volatile than PKU HealthCare Corp. It trades about 0.11 of its potential returns per unit of risk. PKU HealthCare Corp is currently generating about -0.13 per unit of risk. If you would invest  2,031  in Impulse Qingdao Health on December 24, 2024 and sell it today you would earn a total of  472.00  from holding Impulse Qingdao Health or generate 23.24% return on investment over 90 days.

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

Impulse Qingdao Health  vs.  PKU HealthCare Corp

Impulse Qingdao Health

Risk-Adjusted Performance

OK

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

PKU HealthCare Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days PKU HealthCare Corp 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 Impulse Qingdao and PKU HealthCare

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

The idea behind Impulse Qingdao Health and PKU HealthCare Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.