Correlation Between Huaizhong Health and Greenlite Ventures

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

By analyzing existing cross correlation between Huaizhong Health Group and Greenlite Ventures, you can compare the effects of market volatilities on Huaizhong Health and Greenlite Ventures 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 Huaizhong Health with a short position of Greenlite Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaizhong Health and Greenlite Ventures.

Diversification Opportunities for Huaizhong Health and Greenlite Ventures

0.0

Correlation Coefficient

Huaizhong Health  Greenlite Ventures

Pay attention - limited upside

The 3 months correlation between Huaizhong and Greenlite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Huaizhong Health Group and Greenlite Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlite Ventures and Huaizhong 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 Huaizhong Health Group are associated (or correlated) with Greenlite Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlite Ventures has no effect on the direction of Huaizhong Health i.e., Huaizhong Health and Greenlite Ventures go up and down completely randomly.

Pair Corralation between Huaizhong Health and Greenlite Ventures

If you would invest  11.00  in Huaizhong Health Group on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Huaizhong Health Group or generate 0.0% return on investment over 90 days.

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

Huaizhong Health Group  vs.  Greenlite Ventures

Huaizhong Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huaizhong Health Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Huaizhong Health is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Greenlite Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenlite Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Huaizhong Health and Greenlite Ventures

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

The idea behind Huaizhong Health Group and Greenlite Ventures 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..