Correlation Between Next Generation and Zhongchao
Can any of the company-specific risk be diversified away by investing in both Next Generation and Zhongchao 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 Next Generation and Zhongchao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Generation Management and Zhongchao, you can compare the effects of market volatilities on Next Generation and Zhongchao 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 Next Generation with a short position of Zhongchao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Generation and Zhongchao.
Diversification Opportunities for Next Generation and Zhongchao
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Next and Zhongchao is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Next Generation Management and Zhongchao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongchao and Next Generation 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 Next Generation Management are associated (or correlated) with Zhongchao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongchao has no effect on the direction of Next Generation i.e., Next Generation and Zhongchao go up and down completely randomly.
Pair Corralation between Next Generation and Zhongchao
Given the investment horizon of 90 days Next Generation Management is expected to generate 6.53 times more return on investment than Zhongchao. However, Next Generation is 6.53 times more volatile than Zhongchao. It trades about 0.1 of its potential returns per unit of risk. Zhongchao is currently generating about 0.0 per unit of risk. If you would invest 0.23 in Next Generation Management on May 7, 2025 and sell it today you would lose (0.05) from holding Next Generation Management or give up 21.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Next Generation Management vs. Zhongchao
Performance |
Timeline |
Next Generation Mana |
Zhongchao |
Next Generation and Zhongchao Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Next Generation and Zhongchao
The main advantage of trading using opposite Next Generation and Zhongchao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Generation position performs unexpectedly, Zhongchao 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 Zhongchao will offset losses from the drop in Zhongchao's long position.Next Generation vs. Industry Source Consulting | Next Generation vs. Digital Development Partners | Next Generation vs. Bausch Health Companies | Next Generation vs. Medical Cannabis Pay |
Zhongchao vs. Modern Mobility Aids | Zhongchao vs. Scworx Corp | Zhongchao vs. Nano Mobile Healthcare | Zhongchao vs. National Research Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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