Correlation Between Zhongzhu Medical and G Bits

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

By analyzing existing cross correlation between Zhongzhu Medical Holdings and G bits Network Technology, you can compare the effects of market volatilities on Zhongzhu Medical and G Bits 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 Zhongzhu Medical with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongzhu Medical and G Bits.

Diversification Opportunities for Zhongzhu Medical and G Bits

-0.3

Correlation Coefficient

Zhongzhu Medical  G Bits

Very good diversification

The 3 months correlation between Zhongzhu and 603444 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Zhongzhu Medical Holdings and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Zhongzhu 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 Zhongzhu Medical Holdings are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Zhongzhu Medical i.e., Zhongzhu Medical and G Bits go up and down completely randomly.

Pair Corralation between Zhongzhu Medical and G Bits

Assuming the 90 days trading horizon Zhongzhu Medical Holdings is expected to under-perform the G Bits. In addition to that, Zhongzhu Medical is 1.03 times more volatile than G bits Network Technology. It trades about -0.33 of its total potential returns per unit of risk. G bits Network Technology is currently generating about -0.17 per unit of volatility. If you would invest  22,345  in G bits Network Technology on October 11, 2024 and sell it today you would lose (1,815) from holding G bits Network Technology or give up 8.12% of portfolio value over 90 days.

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

Zhongzhu Medical Holdings  vs.  G bits Network Technology

Zhongzhu Medical Holdings

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zhongzhu Medical Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhongzhu Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

G bits Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G bits Network Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Zhongzhu Medical and G Bits

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

The idea behind Zhongzhu Medical Holdings and G bits Network Technology 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.