Correlation Between Adamis Pharma and China SXT

Can any of the company-specific risk be diversified away by investing in both Adamis Pharma and China SXT 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 Adamis Pharma and China SXT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adamis Pharma and China SXT Pharmaceuticals, you can compare the effects of market volatilities on Adamis Pharma and China SXT 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 Adamis Pharma with a short position of China SXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adamis Pharma and China SXT.

Diversification Opportunities for Adamis Pharma and China SXT

0.47

Correlation Coefficient

Adamis Pharma  China SXT

Very weak diversification

The 3 months correlation between Adamis and China is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Adamis Pharma and China SXT Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China SXT Pharmaceuticals and Adamis Pharma 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 Adamis Pharma are associated (or correlated) with China SXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China SXT Pharmaceuticals has no effect on the direction of Adamis Pharma i.e., Adamis Pharma and China SXT go up and down completely randomly.

Pair Corralation between Adamis Pharma and China SXT

If you would invest  174.00  in Adamis Pharma on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Adamis Pharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Adamis Pharma  vs.  China SXT Pharmaceuticals

Adamis Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adamis Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Adamis Pharma is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

China SXT Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China SXT Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Adamis Pharma and China SXT

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

The idea behind Adamis Pharma and China SXT Pharmaceuticals 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.