Correlation Between Wenzhou Kangning and Garofalo Health
Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning and Garofalo Health 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 Garofalo Health 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 Garofalo Health Care, you can compare the effects of market volatilities on Wenzhou Kangning and Garofalo Health 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 Garofalo Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and Garofalo Health.
Diversification Opportunities for Wenzhou Kangning and Garofalo Health
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wenzhou and Garofalo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and Garofalo Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garofalo Health Care 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 Garofalo Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garofalo Health Care has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and Garofalo Health go up and down completely randomly.
Pair Corralation between Wenzhou Kangning and Garofalo Health
Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to under-perform the Garofalo Health. In addition to that, Wenzhou Kangning is 1.14 times more volatile than Garofalo Health Care. It trades about -0.13 of its total potential returns per unit of risk. Garofalo Health Care is currently generating about -0.14 per unit of volatility. If you would invest 568.00 in Garofalo Health Care on October 24, 2024 and sell it today you would lose (66.00) from holding Garofalo Health Care or give up 11.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Wenzhou Kangning Hospital vs. Garofalo Health Care
Performance |
Timeline |
Wenzhou Kangning Hospital |
Garofalo Health Care |
Wenzhou Kangning and Garofalo Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wenzhou Kangning and Garofalo Health
The main advantage of trading using opposite Wenzhou Kangning and Garofalo Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wenzhou Kangning position performs unexpectedly, Garofalo Health 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 Garofalo Health will offset losses from the drop in Garofalo Health's long position.Wenzhou Kangning vs. Altair Engineering | Wenzhou Kangning vs. SOGECLAIR SA INH | Wenzhou Kangning vs. Air New Zealand | Wenzhou Kangning vs. RYANAIR HLDGS ADR |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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