Correlation Between Wenzhou Kangning and American Shipping

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

Diversification Opportunities for Wenzhou Kangning and American Shipping

-0.21

Correlation Coefficient

Wenzhou Kangning  American Shipping

Very good diversification

The 3 months correlation between Wenzhou and American is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping 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 American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and American Shipping go up and down completely randomly.

Pair Corralation between Wenzhou Kangning and American Shipping

Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to under-perform the American Shipping. In addition to that, Wenzhou Kangning is 1.07 times more volatile than American Shipping. It trades about -0.24 of its total potential returns per unit of risk. American Shipping is currently generating about 0.21 per unit of volatility. If you would invest  185.00  in American Shipping on December 22, 2024 and sell it today you would earn a total of  66.00  from holding American Shipping or generate 35.68% 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.  American Shipping

Wenzhou Kangning Hospital

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

American Shipping

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Shipping are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, American Shipping reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wenzhou Kangning and American Shipping

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

The idea behind Wenzhou Kangning Hospital and American Shipping 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.