Correlation Between G Medical and Meihua International

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

By analyzing existing cross correlation between G Medical Innovations and Meihua International Medical, you can compare the effects of market volatilities on G Medical and Meihua International 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 G Medical with a short position of Meihua International. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Medical and Meihua International.

Diversification Opportunities for G Medical and Meihua International

0.0

Correlation Coefficient

G Medical  Meihua International

Pay attention - limited upside

The 3 months correlation between GMVD and Meihua is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding G Medical Innovations and Meihua International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meihua International and G Medical 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 G Medical Innovations are associated (or correlated) with Meihua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meihua International has no effect on the direction of G Medical i.e., G Medical and Meihua International go up and down completely randomly.

Pair Corralation between G Medical and Meihua International

If you would invest (100.00) in G Medical Innovations on December 28, 2024 and sell it today you would earn a total of  100.00  from holding G Medical Innovations or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

G Medical Innovations  vs.  Meihua International Medical

G Medical Innovations

Risk-Adjusted Performance

Very Weak

Over the last 90 days G Medical Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, G Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Meihua International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meihua International Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Meihua International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with G Medical and Meihua International

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

The idea behind G Medical Innovations and Meihua International Medical 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.