Correlation Between Hengkang Medical and Lepu Medical
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By analyzing existing cross correlation between Hengkang Medical Group and Lepu Medical Tech, you can compare the effects of market volatilities on Hengkang Medical and Lepu 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 Hengkang Medical with a short position of Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Lepu Medical.
Diversification Opportunities for Hengkang Medical and Lepu Medical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengkang and Lepu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Lepu Medical Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepu Medical Tech and Hengkang 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 Hengkang Medical Group are associated (or correlated) with Lepu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepu Medical Tech has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Lepu Medical go up and down completely randomly.
Pair Corralation between Hengkang Medical and Lepu Medical
Assuming the 90 days trading horizon Hengkang Medical Group is expected to generate 1.12 times more return on investment than Lepu Medical. However, Hengkang Medical is 1.12 times more volatile than Lepu Medical Tech. It trades about -0.02 of its potential returns per unit of risk. Lepu Medical Tech is currently generating about -0.04 per unit of risk. If you would invest 410.00 in Hengkang Medical Group on September 26, 2024 and sell it today you would lose (137.00) from holding Hengkang Medical Group or give up 33.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hengkang Medical Group vs. Lepu Medical Tech
Performance |
Timeline |
Hengkang Medical |
Lepu Medical Tech |
Hengkang Medical and Lepu Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hengkang Medical and Lepu Medical
The main advantage of trading using opposite Hengkang Medical and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Lepu 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 Lepu Medical will offset losses from the drop in Lepu Medical's long position.Hengkang Medical vs. Agricultural Bank of | Hengkang Medical vs. Industrial and Commercial | Hengkang Medical vs. Bank of China | Hengkang Medical vs. China Construction Bank |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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