Correlation Between Target Hospitality and Huaizhong Health

Can any of the company-specific risk be diversified away by investing in both Target Hospitality and Huaizhong Health 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 Target Hospitality and Huaizhong Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Target Hospitality Corp and Huaizhong Health Group, you can compare the effects of market volatilities on Target Hospitality and Huaizhong Health 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 Target Hospitality with a short position of Huaizhong Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Hospitality and Huaizhong Health.

Diversification Opportunities for Target Hospitality and Huaizhong Health

0.0

Correlation Coefficient

Target Hospitality  Huaizhong Health

Pay attention - limited upside

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

Pair Corralation between Target Hospitality and Huaizhong Health

If you would invest  11.00  in Huaizhong Health Group on December 11, 2024 and sell it today you would earn a total of  0.00  from holding Huaizhong Health Group or generate 0.0% return on investment over 90 days.

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

Target Hospitality Corp  vs.  Huaizhong Health Group

Target Hospitality Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Target Hospitality Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Huaizhong Health

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Target Hospitality and Huaizhong Health

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

The idea behind Target Hospitality Corp and Huaizhong Health Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.