Correlation Between Innovative Medical and Hangzhou Zhongya
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By analyzing existing cross correlation between Innovative Medical Management and Hangzhou Zhongya Machinery, you can compare the effects of market volatilities on Innovative Medical and Hangzhou Zhongya 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 Innovative Medical with a short position of Hangzhou Zhongya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Hangzhou Zhongya.
Diversification Opportunities for Innovative Medical and Hangzhou Zhongya
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innovative and Hangzhou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Hangzhou Zhongya Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Zhongya Mac and Innovative 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 Innovative Medical Management are associated (or correlated) with Hangzhou Zhongya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Zhongya Mac has no effect on the direction of Innovative Medical i.e., Innovative Medical and Hangzhou Zhongya go up and down completely randomly.
Pair Corralation between Innovative Medical and Hangzhou Zhongya
Assuming the 90 days trading horizon Innovative Medical Management is expected to generate 1.2 times more return on investment than Hangzhou Zhongya. However, Innovative Medical is 1.2 times more volatile than Hangzhou Zhongya Machinery. It trades about 0.18 of its potential returns per unit of risk. Hangzhou Zhongya Machinery is currently generating about 0.11 per unit of risk. If you would invest 646.00 in Innovative Medical Management on September 25, 2024 and sell it today you would earn a total of 346.00 from holding Innovative Medical Management or generate 53.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Innovative Medical Management vs. Hangzhou Zhongya Machinery
Performance |
Timeline |
Innovative Medical |
Hangzhou Zhongya Mac |
Innovative Medical and Hangzhou Zhongya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innovative Medical and Hangzhou Zhongya
The main advantage of trading using opposite Innovative Medical and Hangzhou Zhongya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Hangzhou Zhongya 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 Hangzhou Zhongya will offset losses from the drop in Hangzhou Zhongya's long position.Innovative Medical vs. BYD Co Ltd | Innovative Medical vs. China Mobile Limited | Innovative Medical vs. Agricultural Bank of | Innovative Medical vs. Industrial and Commercial |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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