Correlation Between Church Crawford and Huaizhong Health

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

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

Diversification Opportunities for Church Crawford and Huaizhong Health

0.0

Correlation Coefficient

Church Crawford  Huaizhong Health

Pay attention - limited upside

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

Pair Corralation between Church Crawford and Huaizhong Health

If you would invest  0.19  in Church Crawford on September 3, 2024 and sell it today you would earn a total of  0.04  from holding Church Crawford or generate 21.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Church Crawford  vs.  Huaizhong Health Group

Church Crawford

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Church Crawford are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Church Crawford reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Church Crawford and Huaizhong Health

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

The idea behind Church Crawford and Huaizhong Health Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.