Correlation Between CHC Healthcare and YoungQin International

Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and YoungQin International 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 CHC Healthcare and YoungQin International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CHC Healthcare Group and YoungQin International Co, you can compare the effects of market volatilities on CHC Healthcare and YoungQin International 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 CHC Healthcare with a short position of YoungQin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and YoungQin International.

Diversification Opportunities for CHC Healthcare and YoungQin International

0.0

Correlation Coefficient

CHC Healthcare  YoungQin International

Pay attention - limited upside

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

Pair Corralation between CHC Healthcare and YoungQin International

If you would invest  4,065  in CHC Healthcare Group on December 22, 2024 and sell it today you would earn a total of  1,155  from holding CHC Healthcare Group or generate 28.41% return on investment over 90 days.

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

CHC Healthcare Group  vs.  YoungQin International Co

CHC Healthcare Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHC Healthcare Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CHC Healthcare showed solid returns over the last few months and may actually be approaching a breakup point.

YoungQin International

Risk-Adjusted Performance

Good

Over the last 90 days YoungQin International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, YoungQin International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CHC Healthcare and YoungQin International

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

The idea behind CHC Healthcare Group and YoungQin International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.