Correlation Between Medigen Biotechnology and CHINA DEVELOPMENT

Can any of the company-specific risk be diversified away by investing in both Medigen Biotechnology and CHINA DEVELOPMENT 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 Medigen Biotechnology and CHINA DEVELOPMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Medigen Biotechnology and CHINA DEVELOPMENT FINANCIAL, you can compare the effects of market volatilities on Medigen Biotechnology and CHINA DEVELOPMENT 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 Medigen Biotechnology with a short position of CHINA DEVELOPMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medigen Biotechnology and CHINA DEVELOPMENT.

Diversification Opportunities for Medigen Biotechnology and CHINA DEVELOPMENT

-0.71

Correlation Coefficient

Medigen Biotechnology  CHINA DEVELOPMENT

Pay attention - limited upside

The 3 months correlation between Medigen and CHINA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Medigen Biotechnology and CHINA DEVELOPMENT FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA DEVELOPMENT and Medigen Biotechnology 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 Medigen Biotechnology are associated (or correlated) with CHINA DEVELOPMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA DEVELOPMENT has no effect on the direction of Medigen Biotechnology i.e., Medigen Biotechnology and CHINA DEVELOPMENT go up and down completely randomly.

Pair Corralation between Medigen Biotechnology and CHINA DEVELOPMENT

Assuming the 90 days trading horizon Medigen Biotechnology is expected to under-perform the CHINA DEVELOPMENT. In addition to that, Medigen Biotechnology is 9.18 times more volatile than CHINA DEVELOPMENT FINANCIAL. It trades about -0.09 of its total potential returns per unit of risk. CHINA DEVELOPMENT FINANCIAL is currently generating about 0.26 per unit of volatility. If you would invest  779.00  in CHINA DEVELOPMENT FINANCIAL on September 29, 2024 and sell it today you would earn a total of  9.00  from holding CHINA DEVELOPMENT FINANCIAL or generate 1.16% return on investment over 90 days.

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

Medigen Biotechnology  vs.  CHINA DEVELOPMENT FINANCIAL

Medigen Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medigen Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CHINA DEVELOPMENT

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA DEVELOPMENT FINANCIAL are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CHINA DEVELOPMENT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Medigen Biotechnology and CHINA DEVELOPMENT

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

The idea behind Medigen Biotechnology and CHINA DEVELOPMENT FINANCIAL 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.