Correlation Between SS Healthcare and Grand Plastic

Can any of the company-specific risk be diversified away by investing in both SS Healthcare and Grand Plastic 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 SS Healthcare and Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SS Healthcare Holding and Grand Plastic Technology, you can compare the effects of market volatilities on SS Healthcare and Grand Plastic 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 SS Healthcare with a short position of Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS Healthcare and Grand Plastic.

Diversification Opportunities for SS Healthcare and Grand Plastic

-0.01

Correlation Coefficient

SS Healthcare  Grand Plastic

Good diversification

The 3 months correlation between 4198 and Grand is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SS Healthcare Holding and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and SS Healthcare 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 SS Healthcare Holding are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of SS Healthcare i.e., SS Healthcare and Grand Plastic go up and down completely randomly.

Pair Corralation between SS Healthcare and Grand Plastic

Assuming the 90 days trading horizon SS Healthcare is expected to generate 2.97 times less return on investment than Grand Plastic. In addition to that, SS Healthcare is 1.03 times more volatile than Grand Plastic Technology. It trades about 0.02 of its total potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.05 per unit of volatility. If you would invest  160,000  in Grand Plastic Technology on September 5, 2024 and sell it today you would earn a total of  12,000  from holding Grand Plastic Technology or generate 7.5% return on investment over 90 days.

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

SS Healthcare Holding  vs.  Grand Plastic Technology

SS Healthcare Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SS Healthcare Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SS Healthcare is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Grand Plastic Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Plastic Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Grand Plastic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SS Healthcare and Grand Plastic

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

The idea behind SS Healthcare Holding and Grand Plastic Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.