Correlation Between China Times and Medigen Biotechnology

Can any of the company-specific risk be diversified away by investing in both China Times and Medigen Biotechnology 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 China Times and Medigen Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for China Times and Medigen Biotechnology

0.45

Correlation Coefficient

China Times  Medigen Biotechnology

Very weak diversification

The 3 months correlation between China and Medigen is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Times Publishing and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology and China Times 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 China Times Publishing are associated (or correlated) with Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of China Times i.e., China Times and Medigen Biotechnology go up and down completely randomly.

Pair Corralation between China Times and Medigen Biotechnology

Assuming the 90 days trading horizon China Times is expected to generate 1.02 times less return on investment than Medigen Biotechnology. In addition to that, China Times is 1.05 times more volatile than Medigen Biotechnology. It trades about 0.03 of its total potential returns per unit of risk. Medigen Biotechnology is currently generating about 0.04 per unit of volatility. If you would invest  3,240  in Medigen Biotechnology on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Medigen Biotechnology or generate 3.09% return on investment over 90 days.

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

China Times Publishing  vs.  Medigen Biotechnology

China Times Publishing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Times Publishing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, China Times is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Medigen Biotechnology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medigen Biotechnology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Medigen Biotechnology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with China Times and Medigen Biotechnology

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

The idea behind China Times Publishing and Medigen Biotechnology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..