Correlation Between Shenzhen Mindray and Haoxiangni Jujube

Can any of the company-specific risk be diversified away by investing in both Shenzhen Mindray and Haoxiangni Jujube 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 Shenzhen Mindray and Haoxiangni Jujube into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Shenzhen Mindray and Haoxiangni Jujube

-0.58

Correlation Coefficient

Shenzhen Mindray  Haoxiangni Jujube

Excellent diversification

The 3 months correlation between Shenzhen and Haoxiangni is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Haoxiangni Jujube Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haoxiangni Jujube and Shenzhen Mindray 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 Shenzhen Mindray Bio Medical are associated (or correlated) with Haoxiangni Jujube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haoxiangni Jujube has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Haoxiangni Jujube go up and down completely randomly.

Pair Corralation between Shenzhen Mindray and Haoxiangni Jujube

Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to under-perform the Haoxiangni Jujube. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Mindray Bio Medical is 3.07 times less risky than Haoxiangni Jujube. The stock trades about -0.14 of its potential returns per unit of risk. The Haoxiangni Jujube Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  661.00  in Haoxiangni Jujube Co on October 7, 2024 and sell it today you would earn a total of  225.00  from holding Haoxiangni Jujube Co or generate 34.04% return on investment over 90 days.

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

Shenzhen Mindray Bio Medical  vs.  Haoxiangni Jujube Co

Shenzhen Mindray Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenzhen Mindray Bio Medical 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Haoxiangni Jujube

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haoxiangni Jujube Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Haoxiangni Jujube sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenzhen Mindray and Haoxiangni Jujube

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

The idea behind Shenzhen Mindray Bio Medical and Haoxiangni Jujube 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 Stocks Directory module to find actively traded stocks across global markets.