Correlation Between China Health and China Teletech
Can any of the company-specific risk be diversified away by investing in both China Health and China Teletech 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 China Health and China Teletech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Management and China Teletech Holding, you can compare the effects of market volatilities on China Health and China Teletech 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 China Health with a short position of China Teletech. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and China Teletech.
Diversification Opportunities for China Health and China Teletech
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and China Teletech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Teletech Holding and China Health 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 China Health Management are associated (or correlated) with China Teletech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Teletech Holding has no effect on the direction of China Health i.e., China Health and China Teletech go up and down completely randomly.
Pair Corralation between China Health and China Teletech
Given the investment horizon of 90 days China Health is expected to generate 19.91 times less return on investment than China Teletech. But when comparing it to its historical volatility, China Health Management is 10.51 times less risky than China Teletech. It trades about 0.08 of its potential returns per unit of risk. China Teletech Holding is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.08 in China Teletech Holding on December 26, 2024 and sell it today you would earn a total of 20,000 from holding China Teletech Holding or generate 2.49999E7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
China Health Management vs. China Teletech Holding
Performance |
Timeline |
China Health Management |
China Teletech Holding |
China Health and China Teletech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Health and China Teletech
The main advantage of trading using opposite China Health and China Teletech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, China Teletech 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 Teletech will offset losses from the drop in China Teletech's long position.China Health vs. Absolute Health and | China Health vs. Embrace Change Acquisition | China Health vs. Supurva Healthcare Group | China Health vs. TransAKT |
China Teletech vs. Oncologix Tech | China Teletech vs. Aqua Power Systems | China Teletech vs. TransAKT | China Teletech vs. China Health Management |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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