Correlation Between Avicanna and Wuhan General

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

By analyzing existing cross correlation between Avicanna and Wuhan General Gr, you can compare the effects of market volatilities on Avicanna and Wuhan General 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 Avicanna with a short position of Wuhan General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avicanna and Wuhan General.

Diversification Opportunities for Avicanna and Wuhan General

0.46

Correlation Coefficient

Avicanna  Wuhan General

Very weak diversification

The 3 months correlation between Avicanna and Wuhan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Avicanna and Wuhan General Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan General Gr and Avicanna 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 Avicanna are associated (or correlated) with Wuhan General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan General Gr has no effect on the direction of Avicanna i.e., Avicanna and Wuhan General go up and down completely randomly.

Pair Corralation between Avicanna and Wuhan General

If you would invest  20.00  in Avicanna on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Avicanna or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Avicanna  vs.  Wuhan General Gr

Avicanna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avicanna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Avicanna is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Wuhan General Gr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wuhan General Gr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Wuhan General is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Avicanna and Wuhan General

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

The idea behind Avicanna and Wuhan General Gr 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 Transaction History module to view history of all your transactions and understand their impact on performance.