Correlation Between Data Modul and Wenzhou Kangning

Can any of the company-specific risk be diversified away by investing in both Data Modul and Wenzhou Kangning 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 Data Modul and Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Data Modul AG and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Data Modul and Wenzhou Kangning 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 Data Modul with a short position of Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and Wenzhou Kangning.

Diversification Opportunities for Data Modul and Wenzhou Kangning

-0.22

Correlation Coefficient

Data Modul  Wenzhou Kangning

Very good diversification

The 3 months correlation between Data and Wenzhou is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital and Data Modul 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 Data Modul AG are associated (or correlated) with Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Data Modul i.e., Data Modul and Wenzhou Kangning go up and down completely randomly.

Pair Corralation between Data Modul and Wenzhou Kangning

Assuming the 90 days trading horizon Data Modul AG is expected to under-perform the Wenzhou Kangning. In addition to that, Data Modul is 1.43 times more volatile than Wenzhou Kangning Hospital. It trades about -0.01 of its total potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about 0.04 per unit of volatility. If you would invest  96.00  in Wenzhou Kangning Hospital on April 22, 2025 and sell it today you would earn a total of  3.00  from holding Wenzhou Kangning Hospital or generate 3.13% return on investment over 90 days.

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

Data Modul AG  vs.  Wenzhou Kangning Hospital

Data Modul AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Modul AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Data Modul is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Wenzhou Kangning Hospital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wenzhou Kangning Hospital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Wenzhou Kangning is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Data Modul and Wenzhou Kangning

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

The idea behind Data Modul AG and Wenzhou Kangning Hospital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..