Correlation Between China Asset and Lotus Health
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By analyzing existing cross correlation between China Asset Management and Lotus Health Group, you can compare the effects of market volatilities on China Asset and Lotus 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 China Asset with a short position of Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Lotus Health.
Diversification Opportunities for China Asset and Lotus Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Lotus is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group and China Asset 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 China Asset Management are associated (or correlated) with Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of China Asset i.e., China Asset and Lotus Health go up and down completely randomly.
Pair Corralation between China Asset and Lotus Health
Assuming the 90 days trading horizon China Asset Management is expected to under-perform the Lotus Health. But the stock apears to be less risky and, when comparing its historical volatility, China Asset Management is 3.98 times less risky than Lotus Health. The stock trades about -0.03 of its potential returns per unit of risk. The Lotus Health Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 319.00 in Lotus Health Group on September 7, 2024 and sell it today you would earn a total of 193.00 from holding Lotus Health Group or generate 60.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
China Asset Management vs. Lotus Health Group
Performance |
Timeline |
China Asset Management |
Lotus Health Group |
China Asset and Lotus Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Asset and Lotus Health
The main advantage of trading using opposite China Asset and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset position performs unexpectedly, Lotus 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 Lotus Health will offset losses from the drop in Lotus Health's long position.China Asset vs. Industrial and Commercial | China Asset vs. Kweichow Moutai Co | China Asset vs. Agricultural Bank of | China Asset vs. China Mobile Limited |
Lotus Health vs. Shantui Construction Machinery | Lotus Health vs. Linzhou Heavy Machinery | Lotus Health vs. China Railway Construction | Lotus Health vs. Guangdong Jinming Machinery |
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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