Correlation Between Wenzhou Kangning and Peel Mining

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

Diversification Opportunities for Wenzhou Kangning and Peel Mining

-0.09

Correlation Coefficient

Wenzhou Kangning  Peel Mining

Good diversification

The 3 months correlation between Wenzhou and Peel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and Peel Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining Limited 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining Limited has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and Peel Mining go up and down completely randomly.

Pair Corralation between Wenzhou Kangning and Peel Mining

Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to under-perform the Peel Mining. But the stock apears to be less risky and, when comparing its historical volatility, Wenzhou Kangning Hospital is 1.31 times less risky than Peel Mining. The stock trades about -0.25 of its potential returns per unit of risk. The Peel Mining Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6.95  in Peel Mining Limited on October 23, 2024 and sell it today you would earn a total of  0.15  from holding Peel Mining Limited or generate 2.16% 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.  Peel Mining Limited

Wenzhou Kangning Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wenzhou Kangning Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Peel Mining Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peel Mining Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Peel Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wenzhou Kangning and Peel Mining

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

The idea behind Wenzhou Kangning Hospital and Peel Mining Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.