Correlation Between Malion New and ShuYu Civilian

Can any of the company-specific risk be diversified away by investing in both Malion New and ShuYu Civilian 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 Malion New and ShuYu Civilian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Malion New Materials and ShuYu Civilian Pharmacy, you can compare the effects of market volatilities on Malion New and ShuYu Civilian 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 Malion New with a short position of ShuYu Civilian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malion New and ShuYu Civilian.

Diversification Opportunities for Malion New and ShuYu Civilian

0.6

Correlation Coefficient

Malion New  ShuYu Civilian

Poor diversification

The 3 months correlation between Malion and ShuYu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Malion New Materials and ShuYu Civilian Pharmacy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShuYu Civilian Pharmacy and Malion New 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 Malion New Materials are associated (or correlated) with ShuYu Civilian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShuYu Civilian Pharmacy has no effect on the direction of Malion New i.e., Malion New and ShuYu Civilian go up and down completely randomly.

Pair Corralation between Malion New and ShuYu Civilian

Assuming the 90 days trading horizon Malion New Materials is expected to under-perform the ShuYu Civilian. But the stock apears to be less risky and, when comparing its historical volatility, Malion New Materials is 1.21 times less risky than ShuYu Civilian. The stock trades about -0.39 of its potential returns per unit of risk. The ShuYu Civilian Pharmacy is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest  1,429  in ShuYu Civilian Pharmacy on October 10, 2024 and sell it today you would lose (278.00) from holding ShuYu Civilian Pharmacy or give up 19.45% of portfolio value over 90 days.

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

Malion New Materials  vs.  ShuYu Civilian Pharmacy

Malion New Materials

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Malion New Materials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malion New may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ShuYu Civilian Pharmacy

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Malion New and ShuYu Civilian

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

The idea behind Malion New Materials and ShuYu Civilian Pharmacy 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.