Correlation Between Nasdaq and SIMCERE PHARMAC
Can any of the company-specific risk be diversified away by investing in both Nasdaq and SIMCERE PHARMAC 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 Nasdaq and SIMCERE PHARMAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and SIMCERE PHARMAC GRP, you can compare the effects of market volatilities on Nasdaq and SIMCERE PHARMAC 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 Nasdaq with a short position of SIMCERE PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and SIMCERE PHARMAC.
Diversification Opportunities for Nasdaq and SIMCERE PHARMAC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and SIMCERE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and SIMCERE PHARMAC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMCERE PHARMAC GRP and Nasdaq 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 Nasdaq Inc are associated (or correlated) with SIMCERE PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMCERE PHARMAC GRP has no effect on the direction of Nasdaq i.e., Nasdaq and SIMCERE PHARMAC go up and down completely randomly.
Pair Corralation between Nasdaq and SIMCERE PHARMAC
Given the investment horizon of 90 days Nasdaq is expected to generate 1.11 times less return on investment than SIMCERE PHARMAC. But when comparing it to its historical volatility, Nasdaq Inc is 2.57 times less risky than SIMCERE PHARMAC. It trades about 0.12 of its potential returns per unit of risk. SIMCERE PHARMAC GRP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 60.00 in SIMCERE PHARMAC GRP on September 27, 2024 and sell it today you would earn a total of 21.00 from holding SIMCERE PHARMAC GRP or generate 35.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.89% |
Values | Daily Returns |
Nasdaq Inc vs. SIMCERE PHARMAC GRP
Performance |
Timeline |
Nasdaq Inc |
SIMCERE PHARMAC GRP |
Nasdaq and SIMCERE PHARMAC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq and SIMCERE PHARMAC
The main advantage of trading using opposite Nasdaq and SIMCERE PHARMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, SIMCERE PHARMAC 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 SIMCERE PHARMAC will offset losses from the drop in SIMCERE PHARMAC's long position.The idea behind Nasdaq Inc and SIMCERE PHARMAC GRP 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.SIMCERE PHARMAC vs. Merck KGaA | SIMCERE PHARMAC vs. Haleon PLC | SIMCERE PHARMAC vs. LIVZON PHARMAC GRP | SIMCERE PHARMAC vs. CanSino Biologics |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |