Correlation Between Heilongjiang Publishing and APT Medical

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

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

Diversification Opportunities for Heilongjiang Publishing and APT Medical

-0.04

Correlation Coefficient

Heilongjiang Publishing  APT Medical

Good diversification

The 3 months correlation between Heilongjiang and APT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and APT Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APT Medical and Heilongjiang Publishing 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 Heilongjiang Publishing Media 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 Heilongjiang Publishing i.e., Heilongjiang Publishing and APT Medical go up and down completely randomly.

Pair Corralation between Heilongjiang Publishing and APT Medical

Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to under-perform the APT Medical. In addition to that, Heilongjiang Publishing is 1.43 times more volatile than APT Medical. It trades about -0.03 of its total potential returns per unit of risk. APT Medical is currently generating about 0.07 per unit of volatility. If you would invest  25,601  in APT Medical on October 6, 2024 and sell it today you would earn a total of  10,691  from holding APT Medical or generate 41.76% return on investment over 90 days.

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

Heilongjiang Publishing Media  vs.  APT Medical

Heilongjiang Publishing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heilongjiang Publishing Media 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.

APT Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APT Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Heilongjiang Publishing and APT Medical

The main advantage of trading using opposite Heilongjiang Publishing and APT Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Publishing 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 Heilongjiang Publishing Media 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.