Correlation Between Wenzhou Kangning and GRUPO CARSO-A1

Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning and GRUPO CARSO-A1 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 Wenzhou Kangning and GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wenzhou Kangning Hospital and GRUPO CARSO A1, you can compare the effects of market volatilities on Wenzhou Kangning and GRUPO CARSO-A1 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 Wenzhou Kangning with a short position of GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and GRUPO CARSO-A1.

Diversification Opportunities for Wenzhou Kangning and GRUPO CARSO-A1

-0.22

Correlation Coefficient

Wenzhou Kangning  GRUPO CARSO-A1

Very good diversification

The 3 months correlation between Wenzhou and GRUPO is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 and Wenzhou Kangning 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 Wenzhou Kangning Hospital are associated (or correlated) with GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and GRUPO CARSO-A1 go up and down completely randomly.

Pair Corralation between Wenzhou Kangning and GRUPO CARSO-A1

Assuming the 90 days trading horizon Wenzhou Kangning is expected to generate 1.62 times less return on investment than GRUPO CARSO-A1. But when comparing it to its historical volatility, Wenzhou Kangning Hospital is 1.45 times less risky than GRUPO CARSO-A1. It trades about 0.05 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  237.00  in GRUPO CARSO A1 on October 11, 2024 and sell it today you would earn a total of  273.00  from holding GRUPO CARSO A1 or generate 115.19% return on investment over 90 days.

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

Wenzhou Kangning Hospital  vs.  GRUPO CARSO A1

Wenzhou Kangning Hospital

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wenzhou Kangning Hospital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Wenzhou Kangning is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GRUPO CARSO A1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRUPO CARSO A1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Wenzhou Kangning and GRUPO CARSO-A1

The main advantage of trading using opposite Wenzhou Kangning and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wenzhou Kangning position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.

The idea behind Wenzhou Kangning Hospital and GRUPO CARSO A1 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.