Correlation Between Ming Le and Japan Medical

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

By analyzing existing cross correlation between Ming Le Sports and Japan Medical Dynamic, you can compare the effects of market volatilities on Ming Le and Japan Medical 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 Ming Le with a short position of Japan Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and Japan Medical.

Diversification Opportunities for Ming Le and Japan Medical

-0.07

Correlation Coefficient

Ming Le  Japan Medical

Good diversification

The 3 months correlation between Ming and Japan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic and Ming Le 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 Ming Le Sports are associated (or correlated) with Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of Ming Le i.e., Ming Le and Japan Medical go up and down completely randomly.

Pair Corralation between Ming Le and Japan Medical

Assuming the 90 days trading horizon Ming Le Sports is expected to under-perform the Japan Medical. In addition to that, Ming Le is 2.05 times more volatile than Japan Medical Dynamic. It trades about -0.04 of its total potential returns per unit of risk. Japan Medical Dynamic is currently generating about 0.07 per unit of volatility. If you would invest  353.00  in Japan Medical Dynamic on December 29, 2024 and sell it today you would earn a total of  26.00  from holding Japan Medical Dynamic or generate 7.37% return on investment over 90 days.

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

Ming Le Sports  vs.  Japan Medical Dynamic

Ming Le Sports

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ming Le Sports has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Japan Medical Dynamic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Japan Medical Dynamic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Japan Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ming Le and Japan Medical

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

The idea behind Ming Le Sports and Japan Medical Dynamic 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.