Correlation Between Ming Yang and APT Medical

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

By analyzing existing cross correlation between Ming Yang Smart and APT Medical, you can compare the effects of market volatilities on Ming Yang and APT 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 Ming Yang with a short position of APT Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Yang and APT Medical.

Diversification Opportunities for Ming Yang and APT Medical

0.31

Correlation Coefficient

Ming Yang  APT Medical

Weak diversification

The 3 months correlation between Ming and APT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ming Yang Smart and APT Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APT Medical and Ming Yang 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 Ming Yang Smart are associated (or correlated) with APT Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APT Medical has no effect on the direction of Ming Yang i.e., Ming Yang and APT Medical go up and down completely randomly.

Pair Corralation between Ming Yang and APT Medical

Assuming the 90 days trading horizon Ming Yang Smart is expected to under-perform the APT Medical. But the stock apears to be less risky and, when comparing its historical volatility, Ming Yang Smart is 1.09 times less risky than APT Medical. The stock trades about -0.05 of its potential returns per unit of risk. The APT Medical is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  22,215  in APT Medical on September 25, 2024 and sell it today you would earn a total of  12,893  from holding APT Medical or generate 58.04% return on investment over 90 days.

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

Ming Yang Smart  vs.  APT Medical

Ming Yang Smart

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ming Yang Smart are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ming Yang sustained solid returns over the last few months and may actually be approaching a breakup point.

APT Medical

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in APT Medical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, APT Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ming Yang and APT Medical

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

The idea behind Ming Yang Smart and APT Medical 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.