Correlation Between Mingchen Health and G Bits

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Can any of the company-specific risk be diversified away by investing in both Mingchen Health and G Bits 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 Mingchen Health and G Bits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mingchen Health Co and G bits Network Technology, you can compare the effects of market volatilities on Mingchen Health and G Bits 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 Mingchen Health with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mingchen Health and G Bits.

Diversification Opportunities for Mingchen Health and G Bits

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Mingchen and 603444 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mingchen Health Co and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Mingchen Health 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 Mingchen Health Co are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Mingchen Health i.e., Mingchen Health and G Bits go up and down completely randomly.

Pair Corralation between Mingchen Health and G Bits

Assuming the 90 days trading horizon Mingchen Health Co is expected to generate 2.19 times more return on investment than G Bits. However, Mingchen Health is 2.19 times more volatile than G bits Network Technology. It trades about 0.11 of its potential returns per unit of risk. G bits Network Technology is currently generating about -0.19 per unit of risk. If you would invest  1,593  in Mingchen Health Co on October 22, 2024 and sell it today you would earn a total of  107.00  from holding Mingchen Health Co or generate 6.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mingchen Health Co  vs.  G bits Network Technology

 Performance 
       Timeline  
Mingchen Health 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mingchen Health Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mingchen Health sustained solid returns over the last few months and may actually be approaching a breakup point.
G bits Network 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days G bits Network Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mingchen Health and G Bits Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mingchen Health and G Bits

The main advantage of trading using opposite Mingchen Health and G Bits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mingchen Health position performs unexpectedly, G Bits 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 G Bits will offset losses from the drop in G Bits' long position.
The idea behind Mingchen Health Co and G bits Network 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 Stocks Directory module to find actively traded stocks across global markets.

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