Correlation Between Patterson Companies and Sinopharm Group
Can any of the company-specific risk be diversified away by investing in both Patterson Companies and Sinopharm Group 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 Patterson Companies and Sinopharm Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patterson Companies and Sinopharm Group Co, you can compare the effects of market volatilities on Patterson Companies and Sinopharm Group 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 Patterson Companies with a short position of Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson Companies and Sinopharm Group.
Diversification Opportunities for Patterson Companies and Sinopharm Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Patterson and Sinopharm is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Patterson Companies and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group and Patterson Companies 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 Patterson Companies are associated (or correlated) with Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of Patterson Companies i.e., Patterson Companies and Sinopharm Group go up and down completely randomly.
Pair Corralation between Patterson Companies and Sinopharm Group
Assuming the 90 days horizon Patterson Companies is expected to generate 1.73 times more return on investment than Sinopharm Group. However, Patterson Companies is 1.73 times more volatile than Sinopharm Group Co. It trades about 0.16 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.18 per unit of risk. If you would invest 1,904 in Patterson Companies on September 23, 2024 and sell it today you would earn a total of 1,036 from holding Patterson Companies or generate 54.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Patterson Companies vs. Sinopharm Group Co
Performance |
Timeline |
Patterson Companies |
Sinopharm Group |
Patterson Companies and Sinopharm Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Patterson Companies and Sinopharm Group
The main advantage of trading using opposite Patterson Companies and Sinopharm Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson Companies position performs unexpectedly, Sinopharm Group 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 Sinopharm Group will offset losses from the drop in Sinopharm Group's long position.Patterson Companies vs. AmerisourceBergen | Patterson Companies vs. Cardinal Health | Patterson Companies vs. Henry Schein | Patterson Companies vs. Shanghai Pharmaceuticals Holding |
Sinopharm Group vs. AmerisourceBergen | Sinopharm Group vs. Cardinal Health | Sinopharm Group vs. Henry Schein | Sinopharm Group vs. Shanghai Pharmaceuticals Holding |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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