Correlation Between Grape King and Sinphar Pharmaceutical

Can any of the company-specific risk be diversified away by investing in both Grape King and Sinphar Pharmaceutical 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 Grape King and Sinphar Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grape King Bio and Sinphar Pharmaceutical Co, you can compare the effects of market volatilities on Grape King and Sinphar Pharmaceutical 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 Grape King with a short position of Sinphar Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grape King and Sinphar Pharmaceutical.

Diversification Opportunities for Grape King and Sinphar Pharmaceutical

-0.06

Correlation Coefficient

Grape King  Sinphar Pharmaceutical

Good diversification

The 3 months correlation between Grape and Sinphar is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Grape King Bio and Sinphar Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinphar Pharmaceutical and Grape King 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 Grape King Bio are associated (or correlated) with Sinphar Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinphar Pharmaceutical has no effect on the direction of Grape King i.e., Grape King and Sinphar Pharmaceutical go up and down completely randomly.

Pair Corralation between Grape King and Sinphar Pharmaceutical

Assuming the 90 days trading horizon Grape King Bio is expected to generate 0.68 times more return on investment than Sinphar Pharmaceutical. However, Grape King Bio is 1.47 times less risky than Sinphar Pharmaceutical. It trades about -0.02 of its potential returns per unit of risk. Sinphar Pharmaceutical Co is currently generating about -0.08 per unit of risk. If you would invest  15,200  in Grape King Bio on October 7, 2024 and sell it today you would lose (500.00) from holding Grape King Bio or give up 3.29% of portfolio value over 90 days.

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

Grape King Bio  vs.  Sinphar Pharmaceutical Co

Grape King Bio

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grape King Bio are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Grape King is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sinphar Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinphar Pharmaceutical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sinphar Pharmaceutical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Grape King and Sinphar Pharmaceutical

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

The idea behind Grape King Bio and Sinphar Pharmaceutical 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.