Correlation Between Zhengping RoadBridge and Meinian Onehealth

Can any of the company-specific risk be diversified away by investing in both Zhengping RoadBridge and Meinian Onehealth 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 Zhengping RoadBridge and Meinian Onehealth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhengping RoadBridge Constr and Meinian Onehealth Healthcare, you can compare the effects of market volatilities on Zhengping RoadBridge and Meinian Onehealth 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 Zhengping RoadBridge with a short position of Meinian Onehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhengping RoadBridge and Meinian Onehealth.

Diversification Opportunities for Zhengping RoadBridge and Meinian Onehealth

-0.43

Correlation Coefficient

Zhengping RoadBridge  Meinian Onehealth

Very good diversification

The 3 months correlation between Zhengping and Meinian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Zhengping RoadBridge Constr and Meinian Onehealth Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meinian Onehealth and Zhengping RoadBridge 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 Zhengping RoadBridge Constr are associated (or correlated) with Meinian Onehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meinian Onehealth has no effect on the direction of Zhengping RoadBridge i.e., Zhengping RoadBridge and Meinian Onehealth go up and down completely randomly.

Pair Corralation between Zhengping RoadBridge and Meinian Onehealth

Assuming the 90 days trading horizon Zhengping RoadBridge is expected to generate 2.65 times less return on investment than Meinian Onehealth. But when comparing it to its historical volatility, Zhengping RoadBridge Constr is 1.05 times less risky than Meinian Onehealth. It trades about 0.05 of its potential returns per unit of risk. Meinian Onehealth Healthcare is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  469.00  in Meinian Onehealth Healthcare on December 26, 2024 and sell it today you would earn a total of  108.00  from holding Meinian Onehealth Healthcare or generate 23.03% return on investment over 90 days.

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

Zhengping RoadBridge Constr  vs.  Meinian Onehealth Healthcare

Zhengping RoadBridge

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zhengping RoadBridge Constr are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhengping RoadBridge may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Meinian Onehealth

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Meinian Onehealth Healthcare are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Meinian Onehealth sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhengping RoadBridge and Meinian Onehealth

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

The idea behind Zhengping RoadBridge Constr and Meinian Onehealth Healthcare 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.