Correlation Between Kidswant Children and Mingchen Health

Can any of the company-specific risk be diversified away by investing in both Kidswant Children and Mingchen Health 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 Kidswant Children and Mingchen Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kidswant Children Products and Mingchen Health Co, you can compare the effects of market volatilities on Kidswant Children and Mingchen Health 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 Kidswant Children with a short position of Mingchen Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidswant Children and Mingchen Health.

Diversification Opportunities for Kidswant Children and Mingchen Health

0.49

Correlation Coefficient

Kidswant Children  Mingchen Health

Very weak diversification

The 3 months correlation between Kidswant and Mingchen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kidswant Children Products and Mingchen Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingchen Health and Kidswant Children 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 Kidswant Children Products are associated (or correlated) with Mingchen Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingchen Health has no effect on the direction of Kidswant Children i.e., Kidswant Children and Mingchen Health go up and down completely randomly.

Pair Corralation between Kidswant Children and Mingchen Health

Assuming the 90 days trading horizon Kidswant Children Products is expected to generate 1.36 times more return on investment than Mingchen Health. However, Kidswant Children is 1.36 times more volatile than Mingchen Health Co. It trades about 0.03 of its potential returns per unit of risk. Mingchen Health Co is currently generating about 0.04 per unit of risk. If you would invest  1,092  in Kidswant Children Products on October 9, 2024 and sell it today you would earn a total of  31.00  from holding Kidswant Children Products or generate 2.84% return on investment over 90 days.

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

Kidswant Children Products  vs.  Mingchen Health Co

Kidswant Children

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kidswant Children Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kidswant Children may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mingchen Health

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Kidswant Children and Mingchen Health

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

The idea behind Kidswant Children Products and Mingchen Health 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.