Correlation Between PKU HealthCare and Cathay Biotech
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By analyzing existing cross correlation between PKU HealthCare Corp and Cathay Biotech, you can compare the effects of market volatilities on PKU HealthCare and Cathay Biotech 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 PKU HealthCare with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKU HealthCare and Cathay Biotech.
Diversification Opportunities for PKU HealthCare and Cathay Biotech
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PKU and Cathay is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding PKU HealthCare Corp and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and PKU HealthCare 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 PKU HealthCare Corp are associated (or correlated) with Cathay Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Biotech has no effect on the direction of PKU HealthCare i.e., PKU HealthCare and Cathay Biotech go up and down completely randomly.
Pair Corralation between PKU HealthCare and Cathay Biotech
Assuming the 90 days trading horizon PKU HealthCare Corp is expected to generate 1.06 times more return on investment than Cathay Biotech. However, PKU HealthCare is 1.06 times more volatile than Cathay Biotech. It trades about 0.08 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.25 per unit of risk. If you would invest 634.00 in PKU HealthCare Corp on September 15, 2024 and sell it today you would earn a total of 22.00 from holding PKU HealthCare Corp or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKU HealthCare Corp vs. Cathay Biotech
Performance |
| Timeline |
| PKU HealthCare Corp |
| Cathay Biotech |
PKU HealthCare and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKU HealthCare and Cathay Biotech
The main advantage of trading using opposite PKU HealthCare and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKU HealthCare position performs unexpectedly, Cathay Biotech 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 Cathay Biotech will offset losses from the drop in Cathay Biotech's long position.| PKU HealthCare vs. BeiGene | PKU HealthCare vs. Kweichow Moutai Co | PKU HealthCare vs. Beijing Roborock Technology | PKU HealthCare vs. G bits Network Technology |
| Cathay Biotech vs. Zijin Mining Group | Cathay Biotech vs. Wanhua Chemical Group | Cathay Biotech vs. Baoshan Iron Steel | Cathay Biotech vs. Shandong Gold Mining |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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