Correlation Between MEDICAL FACILITIES and ZIJIN MINH

Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and ZIJIN MINH 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 MEDICAL FACILITIES and ZIJIN MINH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDICAL FACILITIES NEW and ZIJIN MINH UNSPADR20, you can compare the effects of market volatilities on MEDICAL FACILITIES and ZIJIN MINH 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 MEDICAL FACILITIES with a short position of ZIJIN MINH. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and ZIJIN MINH.

Diversification Opportunities for MEDICAL FACILITIES and ZIJIN MINH

-0.23

Correlation Coefficient

MEDICAL FACILITIES  ZIJIN MINH

Very good diversification

The 3 months correlation between MEDICAL and ZIJIN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and ZIJIN MINH UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINH UNSPADR20 and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with ZIJIN MINH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINH UNSPADR20 has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and ZIJIN MINH go up and down completely randomly.

Pair Corralation between MEDICAL FACILITIES and ZIJIN MINH

Assuming the 90 days horizon MEDICAL FACILITIES is expected to generate 10.68 times less return on investment than ZIJIN MINH. In addition to that, MEDICAL FACILITIES is 1.34 times more volatile than ZIJIN MINH UNSPADR20. It trades about 0.01 of its total potential returns per unit of risk. ZIJIN MINH UNSPADR20 is currently generating about 0.19 per unit of volatility. If you would invest  3,260  in ZIJIN MINH UNSPADR20 on December 29, 2024 and sell it today you would earn a total of  1,240  from holding ZIJIN MINH UNSPADR20 or generate 38.04% return on investment over 90 days.

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

MEDICAL FACILITIES NEW  vs.  ZIJIN MINH UNSPADR20

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MEDICAL FACILITIES NEW are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MEDICAL FACILITIES is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ZIJIN MINH UNSPADR20

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZIJIN MINH UNSPADR20 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ZIJIN MINH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEDICAL FACILITIES and ZIJIN MINH

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

The idea behind MEDICAL FACILITIES NEW and ZIJIN MINH UNSPADR20 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.