Correlation Between New Hope and Lepu Medical
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By analyzing existing cross correlation between New Hope Dairy and Lepu Medical Tech, you can compare the effects of market volatilities on New Hope 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 New Hope with a short position of Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Lepu Medical.
Diversification Opportunities for New Hope and Lepu Medical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Lepu is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy 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 New Hope 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 New Hope Dairy 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 New Hope i.e., New Hope and Lepu Medical go up and down completely randomly.
Pair Corralation between New Hope and Lepu Medical
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 0.86 times more return on investment than Lepu Medical. However, New Hope Dairy is 1.16 times less risky than Lepu Medical. It trades about 0.19 of its potential returns per unit of risk. Lepu Medical Tech is currently generating about 0.1 per unit of risk. If you would invest 961.00 in New Hope Dairy on September 25, 2024 and sell it today you would earn a total of 460.00 from holding New Hope Dairy or generate 47.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
New Hope Dairy vs. Lepu Medical Tech
Performance |
Timeline |
New Hope Dairy |
Lepu Medical Tech |
New Hope and Lepu Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Hope and Lepu Medical
The main advantage of trading using opposite New Hope and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope 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.New Hope vs. Jiujiang Shanshui Technology | New Hope vs. Niutech Environment Technology | New Hope vs. Kuang Chi Technologies | New Hope vs. Fujian Newland Computer |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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