Correlation Between Healthcare and CITIC Metal
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By analyzing existing cross correlation between Healthcare Co and CITIC Metal Co, you can compare the effects of market volatilities on Healthcare and CITIC Metal 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 Healthcare with a short position of CITIC Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and CITIC Metal.
Diversification Opportunities for Healthcare and CITIC Metal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and CITIC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Co and CITIC Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Metal and 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 Healthcare Co are associated (or correlated) with CITIC Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Metal has no effect on the direction of Healthcare i.e., Healthcare and CITIC Metal go up and down completely randomly.
Pair Corralation between Healthcare and CITIC Metal
Assuming the 90 days trading horizon Healthcare Co is expected to generate 2.35 times more return on investment than CITIC Metal. However, Healthcare is 2.35 times more volatile than CITIC Metal Co. It trades about 0.23 of its potential returns per unit of risk. CITIC Metal Co is currently generating about -0.1 per unit of risk. If you would invest 675.00 in Healthcare Co on September 23, 2024 and sell it today you would earn a total of 81.00 from holding Healthcare Co or generate 12.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Healthcare Co vs. CITIC Metal Co
Performance |
Timeline |
Healthcare |
CITIC Metal |
Healthcare and CITIC Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Healthcare and CITIC Metal
The main advantage of trading using opposite Healthcare and CITIC Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare position performs unexpectedly, CITIC Metal 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 CITIC Metal will offset losses from the drop in CITIC Metal's long position.Healthcare vs. Agricultural Bank of | Healthcare vs. Industrial and Commercial | Healthcare vs. Bank of China | Healthcare 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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