Correlation Between Raphael Pharmaceutical and Qilian International

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

By analyzing existing cross correlation between Raphael Pharmaceutical and Qilian International Holding, you can compare the effects of market volatilities on Raphael Pharmaceutical and Qilian International 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 Raphael Pharmaceutical with a short position of Qilian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raphael Pharmaceutical and Qilian International.

Diversification Opportunities for Raphael Pharmaceutical and Qilian International

0.36

Correlation Coefficient

Raphael Pharmaceutical  Qilian International

Weak diversification

The 3 months correlation between Raphael and Qilian is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Raphael Pharmaceutical and Qilian International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qilian International and Raphael Pharmaceutical 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 Raphael Pharmaceutical are associated (or correlated) with Qilian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qilian International has no effect on the direction of Raphael Pharmaceutical i.e., Raphael Pharmaceutical and Qilian International go up and down completely randomly.

Pair Corralation between Raphael Pharmaceutical and Qilian International

Given the investment horizon of 90 days Raphael Pharmaceutical is expected to generate 1.13 times more return on investment than Qilian International. However, Raphael Pharmaceutical is 1.13 times more volatile than Qilian International Holding. It trades about 0.24 of its potential returns per unit of risk. Qilian International Holding is currently generating about 0.05 per unit of risk. If you would invest  100.00  in Raphael Pharmaceutical on March 11, 2024 and sell it today you would earn a total of  64.00  from holding Raphael Pharmaceutical or generate 64.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Raphael Pharmaceutical  vs.  Qilian International Holding

Raphael Pharmaceutical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Raphael Pharmaceutical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Raphael Pharmaceutical demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Qilian International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qilian International Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Qilian International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raphael Pharmaceutical and Qilian International

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

The idea behind Raphael Pharmaceutical and Qilian International Holding 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.