Correlation Between Avalon GloboCare and Fangdd Network

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

By analyzing existing cross correlation between Avalon GloboCare Corp and Fangdd Network Group, you can compare the effects of market volatilities on Avalon GloboCare and Fangdd Network 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 Avalon GloboCare with a short position of Fangdd Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalon GloboCare and Fangdd Network.

Diversification Opportunities for Avalon GloboCare and Fangdd Network

-0.19

Correlation Coefficient

Avalon GloboCare  Fangdd Network

Good diversification

The 3 months correlation between Avalon and Fangdd is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Avalon GloboCare Corp and Fangdd Network Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangdd Network Group and Avalon GloboCare 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 Avalon GloboCare Corp are associated (or correlated) with Fangdd Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangdd Network Group has no effect on the direction of Avalon GloboCare i.e., Avalon GloboCare and Fangdd Network go up and down completely randomly.

Pair Corralation between Avalon GloboCare and Fangdd Network

Given the investment horizon of 90 days Avalon GloboCare Corp is expected to generate 1.72 times more return on investment than Fangdd Network. However, Avalon GloboCare is 1.72 times more volatile than Fangdd Network Group. It trades about 0.1 of its potential returns per unit of risk. Fangdd Network Group is currently generating about -0.35 per unit of risk. If you would invest  224.00  in Avalon GloboCare Corp on September 5, 2024 and sell it today you would earn a total of  30.00  from holding Avalon GloboCare Corp or generate 13.39% return on investment over 90 days.

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

Avalon GloboCare Corp  vs.  Fangdd Network Group

Avalon GloboCare Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avalon GloboCare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fangdd Network Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fangdd Network Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Fangdd Network displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avalon GloboCare and Fangdd Network

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

The idea behind Avalon GloboCare Corp and Fangdd Network Group 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.