Correlation Between Shenzhen Mindray and Inly Media

Can any of the company-specific risk be diversified away by investing in both Shenzhen Mindray and Inly Media 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 Inly Media 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 Inly Media Co, you can compare the effects of market volatilities on Shenzhen Mindray and Inly Media 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 Inly Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and Inly Media.

Diversification Opportunities for Shenzhen Mindray and Inly Media

0.38

Correlation Coefficient

Shenzhen Mindray  Inly Media

Weak diversification

The 3 months correlation between Shenzhen and Inly is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Inly Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inly Media 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 Inly Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inly Media has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Inly Media go up and down completely randomly.

Pair Corralation between Shenzhen Mindray and Inly Media

Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to under-perform the Inly Media. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Mindray Bio Medical is 3.21 times less risky than Inly Media. The stock trades about -0.06 of its potential returns per unit of risk. The Inly Media Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,741  in Inly Media Co on December 26, 2024 and sell it today you would lose (35.00) from holding Inly Media Co or give up 2.01% of portfolio value over 90 days.

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

Shenzhen Mindray Bio Medical  vs.  Inly Media Co

Shenzhen Mindray Bio

Risk-Adjusted Performance

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 somewhat strong basic indicators, Shenzhen Mindray is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Inly Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inly Media Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Inly Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shenzhen Mindray and Inly Media

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

The idea behind Shenzhen Mindray Bio Medical and Inly Media 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.