Correlation Between ENTREPARTICULIERS and SINOPHARM GROUP

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

By analyzing existing cross correlation between ENTREPARTICULIERS EO 10 and SINOPHARM GROUP 15ON, you can compare the effects of market volatilities on ENTREPARTICULIERS and SINOPHARM GROUP 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 ENTREPARTICULIERS with a short position of SINOPHARM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTREPARTICULIERS and SINOPHARM GROUP.

Diversification Opportunities for ENTREPARTICULIERS and SINOPHARM GROUP

-0.75

Correlation Coefficient

ENTREPARTICULIERS  SINOPHARM GROUP

Pay attention - limited upside

The 3 months correlation between ENTREPARTICULIERS and SINOPHARM is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding ENTREPARTICULIERS EO 10 and SINOPHARM GROUP 15ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPHARM GROUP 15ON and ENTREPARTICULIERS 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 ENTREPARTICULIERS EO 10 are associated (or correlated) with SINOPHARM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINOPHARM GROUP 15ON has no effect on the direction of ENTREPARTICULIERS i.e., ENTREPARTICULIERS and SINOPHARM GROUP go up and down completely randomly.

Pair Corralation between ENTREPARTICULIERS and SINOPHARM GROUP

Assuming the 90 days horizon ENTREPARTICULIERS EO 10 is expected to generate 8.78 times more return on investment than SINOPHARM GROUP. However, ENTREPARTICULIERS is 8.78 times more volatile than SINOPHARM GROUP 15ON. It trades about 0.12 of its potential returns per unit of risk. SINOPHARM GROUP 15ON is currently generating about -0.25 per unit of risk. If you would invest  38.00  in ENTREPARTICULIERS EO 10 on December 26, 2024 and sell it today you would earn a total of  25.00  from holding ENTREPARTICULIERS EO 10 or generate 65.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

ENTREPARTICULIERS EO 10  vs.  SINOPHARM GROUP 15ON

ENTREPARTICULIERS EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENTREPARTICULIERS EO 10 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ENTREPARTICULIERS reported solid returns over the last few months and may actually be approaching a breakup point.

SINOPHARM GROUP 15ON

Risk-Adjusted Performance

Very Weak

Over the last 90 days SINOPHARM GROUP 15ON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ENTREPARTICULIERS and SINOPHARM GROUP

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

The idea behind ENTREPARTICULIERS EO 10 and SINOPHARM GROUP 15ON 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.