Correlation Between Wenzhou Kangning and PENINSULA ENERG

Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning and PENINSULA ENERG 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 PENINSULA ENERG 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 PENINSULA ENERG, you can compare the effects of market volatilities on Wenzhou Kangning and PENINSULA ENERG 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 PENINSULA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and PENINSULA ENERG.

Diversification Opportunities for Wenzhou Kangning and PENINSULA ENERG

-0.42

Correlation Coefficient

Wenzhou Kangning  PENINSULA ENERG

Very good diversification

The 3 months correlation between Wenzhou and PENINSULA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG 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 PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and PENINSULA ENERG go up and down completely randomly.

Pair Corralation between Wenzhou Kangning and PENINSULA ENERG

Assuming the 90 days trading horizon Wenzhou Kangning is expected to generate 12.54 times less return on investment than PENINSULA ENERG. But when comparing it to its historical volatility, Wenzhou Kangning Hospital is 16.07 times less risky than PENINSULA ENERG. It trades about 0.05 of its potential returns per unit of risk. PENINSULA ENERG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  185.00  in PENINSULA ENERG on October 4, 2024 and sell it today you would lose (106.00) from holding PENINSULA ENERG or give up 57.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Wenzhou Kangning Hospital  vs.  PENINSULA ENERG

Wenzhou Kangning Hospital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wenzhou Kangning Hospital are ranked lower than 4 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

PENINSULA ENERG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PENINSULA ENERG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Wenzhou Kangning and PENINSULA ENERG

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

The idea behind Wenzhou Kangning Hospital and PENINSULA ENERG 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.