Correlation Between Bosera CMSK and Xiangyu Medical

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

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

Diversification Opportunities for Bosera CMSK and Xiangyu Medical

0.19

Correlation Coefficient

Bosera CMSK  Xiangyu Medical

Average diversification

The 3 months correlation between Bosera and Xiangyu is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bosera CMSK Industrial and Xiangyu Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyu Medical and Bosera CMSK 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 Bosera CMSK Industrial are associated (or correlated) with Xiangyu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyu Medical has no effect on the direction of Bosera CMSK i.e., Bosera CMSK and Xiangyu Medical go up and down completely randomly.

Pair Corralation between Bosera CMSK and Xiangyu Medical

Assuming the 90 days trading horizon Bosera CMSK Industrial is expected to under-perform the Xiangyu Medical. But the stock apears to be less risky and, when comparing its historical volatility, Bosera CMSK Industrial is 2.61 times less risky than Xiangyu Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Xiangyu Medical Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,463  in Xiangyu Medical Co on October 4, 2024 and sell it today you would lose (524.00) from holding Xiangyu Medical Co or give up 15.13% of portfolio value over 90 days.

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

Bosera CMSK Industrial  vs.  Xiangyu Medical Co

Bosera CMSK Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bosera CMSK Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bosera CMSK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Xiangyu Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiangyu Medical Co 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.

Pair Trading with Bosera CMSK and Xiangyu Medical

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

The idea behind Bosera CMSK Industrial and Xiangyu 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.