Correlation Between Peijia Medical and AURELIUS Equity

Can any of the company-specific risk be diversified away by investing in both Peijia Medical and AURELIUS Equity 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 Peijia Medical and AURELIUS Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Peijia Medical Limited and AURELIUS Equity Opportunities, you can compare the effects of market volatilities on Peijia Medical and AURELIUS Equity 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 Peijia Medical with a short position of AURELIUS Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and AURELIUS Equity.

Diversification Opportunities for Peijia Medical and AURELIUS Equity

0.03

Correlation Coefficient

Peijia Medical  AURELIUS Equity

Significant diversification

The 3 months correlation between Peijia and AURELIUS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and AURELIUS Equity Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURELIUS Equity Oppo and Peijia Medical 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 Peijia Medical Limited are associated (or correlated) with AURELIUS Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURELIUS Equity Oppo has no effect on the direction of Peijia Medical i.e., Peijia Medical and AURELIUS Equity go up and down completely randomly.

Pair Corralation between Peijia Medical and AURELIUS Equity

Assuming the 90 days horizon Peijia Medical Limited is expected to under-perform the AURELIUS Equity. But the stock apears to be less risky and, when comparing its historical volatility, Peijia Medical Limited is 20.62 times less risky than AURELIUS Equity. The stock trades about -0.01 of its potential returns per unit of risk. The AURELIUS Equity Opportunities is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,360  in AURELIUS Equity Opportunities on October 25, 2024 and sell it today you would earn a total of  6,800  from holding AURELIUS Equity Opportunities or generate 500.0% return on investment over 90 days.

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

Peijia Medical Limited  vs.  AURELIUS Equity Opportunities

Peijia Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peijia Medical Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Peijia Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AURELIUS Equity Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AURELIUS Equity Opportunities are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AURELIUS Equity unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peijia Medical and AURELIUS Equity

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

The idea behind Peijia Medical Limited and AURELIUS Equity Opportunities 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.