Correlation Between MPX International and China SXT

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

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

Diversification Opportunities for MPX International and China SXT

-0.37

Correlation Coefficient

MPX International  China SXT

Very good diversification

The 3 months correlation between MPX and China is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding MPX International Corp 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 MPX International 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 MPX International Corp 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 MPX International i.e., MPX International and China SXT go up and down completely randomly.

Pair Corralation between MPX International and China SXT

Assuming the 90 days horizon MPX International Corp is expected to generate 19.85 times more return on investment than China SXT. However, MPX International is 19.85 times more volatile than China SXT Pharmaceuticals. It trades about 0.3 of its potential returns per unit of risk. China SXT Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  0.02  in MPX International Corp on September 16, 2024 and sell it today you would earn a total of  0.00  from holding MPX International Corp or generate 0.0% return on investment over 90 days.

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

MPX International Corp  vs.  China SXT Pharmaceuticals

MPX International Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MPX International Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MPX International reported solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with MPX International and China SXT

The main advantage of trading using opposite MPX International and China SXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPX International 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 MPX International Corp 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.