Correlation Between SIMCERE PHARMAC and PEPTONIC MEDICAL

Can any of the company-specific risk be diversified away by investing in both SIMCERE PHARMAC and PEPTONIC MEDICAL 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 SIMCERE PHARMAC and PEPTONIC MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIMCERE PHARMAC GRP and PEPTONIC MEDICAL, you can compare the effects of market volatilities on SIMCERE PHARMAC and PEPTONIC MEDICAL 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 SIMCERE PHARMAC with a short position of PEPTONIC MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMCERE PHARMAC and PEPTONIC MEDICAL.

Diversification Opportunities for SIMCERE PHARMAC and PEPTONIC MEDICAL

0.0

Correlation Coefficient

SIMCERE PHARMAC  PEPTONIC MEDICAL

Pay attention - limited upside

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

Pair Corralation between SIMCERE PHARMAC and PEPTONIC MEDICAL

If you would invest  94.00  in SIMCERE PHARMAC GRP on April 20, 2025 and sell it today you would earn a total of  30.00  from holding SIMCERE PHARMAC GRP or generate 31.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SIMCERE PHARMAC GRP  vs.  PEPTONIC MEDICAL

SIMCERE PHARMAC GRP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIMCERE PHARMAC GRP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIMCERE PHARMAC reported solid returns over the last few months and may actually be approaching a breakup point.

PEPTONIC MEDICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days PEPTONIC MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PEPTONIC MEDICAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIMCERE PHARMAC and PEPTONIC MEDICAL

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

The idea behind SIMCERE PHARMAC GRP and PEPTONIC MEDICAL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.