Correlation Between Double Medical and Lepu Medical
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By analyzing existing cross correlation between Double Medical Technology and Lepu Medical Tech, you can compare the effects of market volatilities on Double 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 Double Medical with a short position of Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Medical and Lepu Medical.
Diversification Opportunities for Double Medical and Lepu Medical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Double and Lepu is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Double Medical Technology 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 Double 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 Double Medical Technology 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 Double Medical i.e., Double Medical and Lepu Medical go up and down completely randomly.
Pair Corralation between Double Medical and Lepu Medical
Assuming the 90 days trading horizon Double Medical is expected to generate 1.18 times less return on investment than Lepu Medical. But when comparing it to its historical volatility, Double Medical Technology is 1.53 times less risky than Lepu Medical. It trades about 0.1 of its potential returns per unit of risk. Lepu Medical Tech is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,034 in Lepu Medical Tech on September 26, 2024 and sell it today you would earn a total of 154.00 from holding Lepu Medical Tech or generate 14.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Double Medical Technology vs. Lepu Medical Tech
Performance |
Timeline |
Double Medical Technology |
Lepu Medical Tech |
Double Medical and Lepu Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Double Medical and Lepu Medical
The main advantage of trading using opposite Double Medical and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double 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.Double Medical vs. New China Life | Double Medical vs. Ming Yang Smart | Double Medical vs. 159681 | Double Medical vs. 159005 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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