Given investment horizon of 30 days, China Sky One Medical Inc. is expected to generate 0.53 times more return on investment than Herbalife. However, China Sky One Medical Inc. is 1.88 times less risky than Herbalife. It trades about -0.14 of its potential returns per unit of risk. Herbalife Ltd. is currently generating about -0.25 per unit of risk. If you would invest 32.00 in China Sky One Medical Inc. on April 25, 2012 and sell it today you would lose (2.00) from holding China Sky One Medical Inc. or give up 6.25% of portfolio value over 30 days.
Diversification
Good diversification
Overlapping area represents amount of risk that can be diversified away by holding China Sky One Medical Inc. and Herbalife Ltd. in the same portfolio (assuming nothing else is changed)