Correlation Between China Railway and InMode
Can any of the company-specific risk be diversified away by investing in both China Railway and InMode 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 Railway and InMode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Railway Group and InMode, you can compare the effects of market volatilities on China Railway and InMode 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 Railway with a short position of InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and InMode.
Diversification Opportunities for China Railway and InMode
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and InMode is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and China Railway 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 Railway Group are associated (or correlated) with InMode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMode has no effect on the direction of China Railway i.e., China Railway and InMode go up and down completely randomly.
Pair Corralation between China Railway and InMode
Assuming the 90 days horizon China Railway is expected to generate 1.12 times less return on investment than InMode. In addition to that, China Railway is 2.19 times more volatile than InMode. It trades about 0.13 of its total potential returns per unit of risk. InMode is currently generating about 0.33 per unit of volatility. If you would invest 1,667 in InMode on December 4, 2024 and sell it today you would earn a total of 222.00 from holding InMode or generate 13.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
China Railway Group vs. InMode
Performance |
Timeline |
China Railway Group |
InMode |
China Railway and InMode Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Railway and InMode
The main advantage of trading using opposite China Railway and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, InMode 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 InMode will offset losses from the drop in InMode's long position.China Railway vs. Arcadis NV | China Railway vs. VINCI SA | China Railway vs. Skanska AB ser | China Railway vs. Digital Locations |
InMode vs. TransMedics Group | InMode vs. Inspire Medical Systems | InMode vs. Insulet | InMode vs. DexCom Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |