Correlation Between Heren Health and Shandong Publishing

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

By analyzing existing cross correlation between Heren Health Co and Shandong Publishing Media, you can compare the effects of market volatilities on Heren Health and Shandong Publishing 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 Heren Health with a short position of Shandong Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heren Health and Shandong Publishing.

Diversification Opportunities for Heren Health and Shandong Publishing

-0.62

Correlation Coefficient

Heren Health  Shandong Publishing

Excellent diversification

The 3 months correlation between Heren and Shandong is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Heren Health Co and Shandong Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Publishing Media and Heren Health 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 Heren Health Co are associated (or correlated) with Shandong Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Publishing Media has no effect on the direction of Heren Health i.e., Heren Health and Shandong Publishing go up and down completely randomly.

Pair Corralation between Heren Health and Shandong Publishing

Assuming the 90 days trading horizon Heren Health Co is expected to under-perform the Shandong Publishing. But the stock apears to be less risky and, when comparing its historical volatility, Heren Health Co is 1.41 times less risky than Shandong Publishing. The stock trades about -0.09 of its potential returns per unit of risk. The Shandong Publishing Media is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,073  in Shandong Publishing Media on September 21, 2024 and sell it today you would earn a total of  85.00  from holding Shandong Publishing Media or generate 7.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Heren Health Co  vs.  Shandong Publishing Media

Heren Health

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heren Health Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heren Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Shandong Publishing Media

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shandong Publishing Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shandong Publishing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Heren Health and Shandong Publishing

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

The idea behind Heren Health Co and Shandong Publishing Media 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.