Correlation Between Shanghai OPM and Gemdale Corp

Can any of the company-specific risk be diversified away by investing in both Shanghai OPM and Gemdale Corp 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 Shanghai OPM and Gemdale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shanghai OPM Biosciences and Gemdale Corp, you can compare the effects of market volatilities on Shanghai OPM and Gemdale Corp 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 Shanghai OPM with a short position of Gemdale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai OPM and Gemdale Corp.

Diversification Opportunities for Shanghai OPM and Gemdale Corp

0.0

Correlation Coefficient

Shanghai OPM  Gemdale Corp

Pay attention - limited upside

The 3 months correlation between Shanghai and Gemdale is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai OPM Biosciences and Gemdale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemdale Corp and Shanghai OPM 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 Shanghai OPM Biosciences are associated (or correlated) with Gemdale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemdale Corp has no effect on the direction of Shanghai OPM i.e., Shanghai OPM and Gemdale Corp go up and down completely randomly.

Pair Corralation between Shanghai OPM and Gemdale Corp

If you would invest (100.00) in Shanghai OPM Biosciences on October 8, 2024 and sell it today you would earn a total of  100.00  from holding Shanghai OPM Biosciences or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shanghai OPM Biosciences  vs.  Gemdale Corp

Shanghai OPM Biosciences

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Shanghai OPM Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shanghai OPM is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gemdale Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gemdale Corp 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 Shanghai OPM and Gemdale Corp

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

The idea behind Shanghai OPM Biosciences and Gemdale Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.