Correlation Between Xiangyu Medical and Nancal Energy-Saving

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

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

Diversification Opportunities for Xiangyu Medical and Nancal Energy-Saving

0.51

Correlation Coefficient

Xiangyu Medical  Nancal Energy-Saving

Very weak diversification

The 3 months correlation between Xiangyu and Nancal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyu Medical Co and Nancal Energy Saving Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nancal Energy Saving and Xiangyu Medical 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 Xiangyu Medical Co are associated (or correlated) with Nancal Energy-Saving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nancal Energy Saving has no effect on the direction of Xiangyu Medical i.e., Xiangyu Medical and Nancal Energy-Saving go up and down completely randomly.

Pair Corralation between Xiangyu Medical and Nancal Energy-Saving

Assuming the 90 days trading horizon Xiangyu Medical Co is expected to generate 0.72 times more return on investment than Nancal Energy-Saving. However, Xiangyu Medical Co is 1.39 times less risky than Nancal Energy-Saving. It trades about 0.1 of its potential returns per unit of risk. Nancal Energy Saving Tech is currently generating about 0.04 per unit of risk. If you would invest  3,053  in Xiangyu Medical Co on December 4, 2024 and sell it today you would earn a total of  562.00  from holding Xiangyu Medical Co or generate 18.41% return on investment over 90 days.

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

Xiangyu Medical Co  vs.  Nancal Energy Saving Tech

Xiangyu Medical

Risk-Adjusted Performance

OK

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

Nancal Energy Saving

Risk-Adjusted Performance

Weak

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

Pair Trading with Xiangyu Medical and Nancal Energy-Saving

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

The idea behind Xiangyu Medical Co and Nancal Energy Saving Tech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.