Correlation Between Ningbo Jintian and Allmed Medical

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

By analyzing existing cross correlation between Ningbo Jintian Copper and Allmed Medical Products, you can compare the effects of market volatilities on Ningbo Jintian and Allmed Medical 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 Ningbo Jintian with a short position of Allmed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Jintian and Allmed Medical.

Diversification Opportunities for Ningbo Jintian and Allmed Medical

0.58

Correlation Coefficient

Ningbo Jintian  Allmed Medical

Very weak diversification

The 3 months correlation between Ningbo and Allmed is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Jintian Copper and Allmed Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allmed Medical Products and Ningbo Jintian 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 Ningbo Jintian Copper are associated (or correlated) with Allmed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allmed Medical Products has no effect on the direction of Ningbo Jintian i.e., Ningbo Jintian and Allmed Medical go up and down completely randomly.

Pair Corralation between Ningbo Jintian and Allmed Medical

Assuming the 90 days trading horizon Ningbo Jintian Copper is expected to under-perform the Allmed Medical. In addition to that, Ningbo Jintian is 2.04 times more volatile than Allmed Medical Products. It trades about -0.06 of its total potential returns per unit of risk. Allmed Medical Products is currently generating about -0.11 per unit of volatility. If you would invest  905.00  in Allmed Medical Products on October 9, 2024 and sell it today you would lose (40.00) from holding Allmed Medical Products or give up 4.42% of portfolio value over 90 days.

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

Ningbo Jintian Copper  vs.  Allmed Medical Products

Ningbo Jintian Copper

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ningbo Jintian Copper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ningbo Jintian is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allmed Medical Products

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allmed Medical Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Allmed Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ningbo Jintian and Allmed Medical

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

The idea behind Ningbo Jintian Copper and Allmed Medical Products 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.