Correlation Between China Health and Pioneer Floating

Can any of the company-specific risk be diversified away by investing in both China Health and Pioneer Floating 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 Pioneer Floating 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 Pioneer Floating Rate, you can compare the effects of market volatilities on China Health and Pioneer Floating 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 Pioneer Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Pioneer Floating.

Diversification Opportunities for China Health and Pioneer Floating

-0.35

Correlation Coefficient

China Health  Pioneer Floating

Very good diversification

The 3 months correlation between China and Pioneer is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Pioneer Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Floating Rate 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 Pioneer Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Floating Rate has no effect on the direction of China Health i.e., China Health and Pioneer Floating go up and down completely randomly.

Pair Corralation between China Health and Pioneer Floating

Given the investment horizon of 90 days China Health Management is expected to under-perform the Pioneer Floating. In addition to that, China Health is 26.83 times more volatile than Pioneer Floating Rate. It trades about -0.08 of its total potential returns per unit of risk. Pioneer Floating Rate is currently generating about 0.09 per unit of volatility. If you would invest  964.00  in Pioneer Floating Rate on September 16, 2024 and sell it today you would earn a total of  20.00  from holding Pioneer Floating Rate or generate 2.07% return on investment over 90 days.

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

China Health Management  vs.  Pioneer Floating Rate

China Health Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Health Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pioneer Floating Rate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Floating Rate are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Pioneer Floating is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with China Health and Pioneer Floating

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

The idea behind China Health Management and Pioneer Floating Rate 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.