Correlation Between Ma Kuang and Tacheng Real

Can any of the company-specific risk be diversified away by investing in both Ma Kuang and Tacheng Real 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 Ma Kuang and Tacheng Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ma Kuang Healthcare and Tacheng Real Estate, you can compare the effects of market volatilities on Ma Kuang and Tacheng Real 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 Ma Kuang with a short position of Tacheng Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ma Kuang and Tacheng Real.

Diversification Opportunities for Ma Kuang and Tacheng Real

0.0

Correlation Coefficient

Ma Kuang  Tacheng Real

Pay attention - limited upside

The 3 months correlation between 4139 and Tacheng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ma Kuang Healthcare and Tacheng Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tacheng Real Estate and Ma Kuang 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 Ma Kuang Healthcare are associated (or correlated) with Tacheng Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tacheng Real Estate has no effect on the direction of Ma Kuang i.e., Ma Kuang and Tacheng Real go up and down completely randomly.

Pair Corralation between Ma Kuang and Tacheng Real

If you would invest  3,230  in Ma Kuang Healthcare on October 1, 2024 and sell it today you would earn a total of  85.00  from holding Ma Kuang Healthcare or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ma Kuang Healthcare  vs.  Tacheng Real Estate

Ma Kuang Healthcare

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ma Kuang Healthcare are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ma Kuang is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tacheng Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tacheng Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Tacheng Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ma Kuang and Tacheng Real

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

The idea behind Ma Kuang Healthcare and Tacheng Real Estate 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.