Correlation Between Sanbo Hospital and Tongling Nonferrous

Can any of the company-specific risk be diversified away by investing in both Sanbo Hospital and Tongling Nonferrous 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 Sanbo Hospital and Tongling Nonferrous into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sanbo Hospital Management and Tongling Nonferrous Metals, you can compare the effects of market volatilities on Sanbo Hospital and Tongling Nonferrous 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 Sanbo Hospital with a short position of Tongling Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanbo Hospital and Tongling Nonferrous.

Diversification Opportunities for Sanbo Hospital and Tongling Nonferrous

0.69

Correlation Coefficient

Sanbo Hospital  Tongling Nonferrous

Poor diversification

The 3 months correlation between Sanbo and Tongling is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sanbo Hospital Management and Tongling Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongling Nonferrous and Sanbo Hospital 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 Sanbo Hospital Management are associated (or correlated) with Tongling Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongling Nonferrous has no effect on the direction of Sanbo Hospital i.e., Sanbo Hospital and Tongling Nonferrous go up and down completely randomly.

Pair Corralation between Sanbo Hospital and Tongling Nonferrous

Assuming the 90 days trading horizon Sanbo Hospital Management is expected to under-perform the Tongling Nonferrous. In addition to that, Sanbo Hospital is 2.12 times more volatile than Tongling Nonferrous Metals. It trades about -0.15 of its total potential returns per unit of risk. Tongling Nonferrous Metals is currently generating about 0.09 per unit of volatility. If you would invest  347.00  in Tongling Nonferrous Metals on September 13, 2024 and sell it today you would earn a total of  11.00  from holding Tongling Nonferrous Metals or generate 3.17% return on investment over 90 days.

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

Sanbo Hospital Management  vs.  Tongling Nonferrous Metals

Sanbo Hospital Management

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sanbo Hospital Management are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sanbo Hospital sustained solid returns over the last few months and may actually be approaching a breakup point.

Tongling Nonferrous

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Sanbo Hospital and Tongling Nonferrous

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

The idea behind Sanbo Hospital Management and Tongling Nonferrous Metals 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.