Correlation Between Alkame Holdings and China Health
Can any of the company-specific risk be diversified away by investing in both Alkame Holdings and China Health 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 Alkame Holdings and China Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkame Holdings and China Health Industries, you can compare the effects of market volatilities on Alkame Holdings and China Health 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 Alkame Holdings with a short position of China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkame Holdings and China Health.
Diversification Opportunities for Alkame Holdings and China Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alkame and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alkame Holdings and China Health Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Industries and Alkame Holdings 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 Alkame Holdings are associated (or correlated) with China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Industries has no effect on the direction of Alkame Holdings i.e., Alkame Holdings and China Health go up and down completely randomly.
Pair Corralation between Alkame Holdings and China Health
Given the investment horizon of 90 days Alkame Holdings is expected to under-perform the China Health. In addition to that, Alkame Holdings is 4.48 times more volatile than China Health Industries. It trades about -0.12 of its total potential returns per unit of risk. China Health Industries is currently generating about -0.08 per unit of volatility. If you would invest 33.00 in China Health Industries on September 14, 2024 and sell it today you would lose (5.00) from holding China Health Industries or give up 15.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Alkame Holdings vs. China Health Industries
Performance |
Timeline |
Alkame Holdings |
China Health Industries |
Alkame Holdings and China Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alkame Holdings and China Health
The main advantage of trading using opposite Alkame Holdings and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkame Holdings position performs unexpectedly, China Health 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 China Health will offset losses from the drop in China Health's long position.Alkame Holdings vs. Hill Street Beverage | ||
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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