Correlation Between MEDIPAL HOLDINGS and Sinopharm Group

Can any of the company-specific risk be diversified away by investing in both MEDIPAL HOLDINGS and Sinopharm Group 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 MEDIPAL HOLDINGS and Sinopharm Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDIPAL HOLDINGS P and Sinopharm Group Co, you can compare the effects of market volatilities on MEDIPAL HOLDINGS and Sinopharm Group 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 MEDIPAL HOLDINGS with a short position of Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIPAL HOLDINGS and Sinopharm Group.

Diversification Opportunities for MEDIPAL HOLDINGS and Sinopharm Group

-0.23

Correlation Coefficient

MEDIPAL HOLDINGS  Sinopharm Group

Very good diversification

The 3 months correlation between MEDIPAL and Sinopharm is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPAL HOLDINGS P and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group and MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS P are associated (or correlated) with Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of MEDIPAL HOLDINGS i.e., MEDIPAL HOLDINGS and Sinopharm Group go up and down completely randomly.

Pair Corralation between MEDIPAL HOLDINGS and Sinopharm Group

Assuming the 90 days horizon MEDIPAL HOLDINGS P is expected to under-perform the Sinopharm Group. But the stock apears to be less risky and, when comparing its historical volatility, MEDIPAL HOLDINGS P is 1.51 times less risky than Sinopharm Group. The stock trades about -0.2 of its potential returns per unit of risk. The Sinopharm Group Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  242.00  in Sinopharm Group Co on September 23, 2024 and sell it today you would earn a total of  22.00  from holding Sinopharm Group Co or generate 9.09% return on investment over 90 days.

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

MEDIPAL HOLDINGS P  vs.  Sinopharm Group Co

MEDIPAL HOLDINGS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIPAL HOLDINGS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sinopharm Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sinopharm Group Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sinopharm Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEDIPAL HOLDINGS and Sinopharm Group

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

The idea behind MEDIPAL HOLDINGS P and Sinopharm Group Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.