Correlation Between CareRay Digital and Winner Medical

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

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

Diversification Opportunities for CareRay Digital and Winner Medical

0.76

Correlation Coefficient

CareRay Digital  Winner Medical

Poor diversification

The 3 months correlation between CareRay and Winner is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CareRay Digital Medical and Winner Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Medical and CareRay Digital 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 CareRay Digital Medical are associated (or correlated) with Winner Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Medical has no effect on the direction of CareRay Digital i.e., CareRay Digital and Winner Medical go up and down completely randomly.

Pair Corralation between CareRay Digital and Winner Medical

Assuming the 90 days trading horizon CareRay Digital Medical is expected to under-perform the Winner Medical. In addition to that, CareRay Digital is 1.32 times more volatile than Winner Medical Co. It trades about -0.01 of its total potential returns per unit of risk. Winner Medical Co is currently generating about 0.0 per unit of volatility. If you would invest  4,749  in Winner Medical Co on September 28, 2024 and sell it today you would lose (554.00) from holding Winner Medical Co or give up 11.67% of portfolio value over 90 days.

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

CareRay Digital Medical  vs.  Winner Medical Co

CareRay Digital Medical

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CareRay Digital Medical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CareRay Digital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Winner Medical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Winner Medical Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winner Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CareRay Digital and Winner Medical

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

The idea behind CareRay Digital Medical and Winner Medical Co 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.