Correlation Between Akoya Biosciences and Meihua International

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

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

Diversification Opportunities for Akoya Biosciences and Meihua International

0.02

Correlation Coefficient

Akoya Biosciences  Meihua International

Significant diversification

The 3 months correlation between Akoya and Meihua is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Akoya Biosciences and Meihua International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meihua International and Akoya Biosciences 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 Akoya Biosciences are associated (or correlated) with Meihua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meihua International has no effect on the direction of Akoya Biosciences i.e., Akoya Biosciences and Meihua International go up and down completely randomly.

Pair Corralation between Akoya Biosciences and Meihua International

Given the investment horizon of 90 days Akoya Biosciences is expected to generate 0.68 times more return on investment than Meihua International. However, Akoya Biosciences is 1.47 times less risky than Meihua International. It trades about 0.01 of its potential returns per unit of risk. Meihua International Medical is currently generating about -0.07 per unit of risk. If you would invest  238.00  in Akoya Biosciences on September 2, 2024 and sell it today you would lose (18.00) from holding Akoya Biosciences or give up 7.56% of portfolio value over 90 days.

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

Akoya Biosciences  vs.  Meihua International Medical

Akoya Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

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

Meihua International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meihua International Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Akoya Biosciences and Meihua International

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

The idea behind Akoya Biosciences and Meihua International Medical 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.