Correlation Between Dezhan HealthCare and Cathay Biotech
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By analyzing existing cross correlation between Dezhan HealthCare Co and Cathay Biotech, you can compare the effects of market volatilities on Dezhan 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 Dezhan HealthCare with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dezhan HealthCare and Cathay Biotech.
Diversification Opportunities for Dezhan HealthCare and Cathay Biotech
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dezhan and Cathay is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dezhan HealthCare Co and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and Dezhan 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 Dezhan HealthCare Co 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 Dezhan HealthCare i.e., Dezhan HealthCare and Cathay Biotech go up and down completely randomly.
Pair Corralation between Dezhan HealthCare and Cathay Biotech
Assuming the 90 days trading horizon Dezhan HealthCare Co is expected to generate 2.83 times more return on investment than Cathay Biotech. However, Dezhan HealthCare is 2.83 times more volatile than Cathay Biotech. It trades about 0.38 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.25 per unit of risk. If you would invest 297.00 in Dezhan HealthCare Co on September 15, 2024 and sell it today you would earn a total of 165.00 from holding Dezhan HealthCare Co or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dezhan HealthCare Co vs. Cathay Biotech
Performance |
| Timeline |
| Dezhan HealthCare |
| Cathay Biotech |
Dezhan HealthCare and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dezhan HealthCare and Cathay Biotech
The main advantage of trading using opposite Dezhan HealthCare and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dezhan 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.| Dezhan HealthCare vs. BeiGene | Dezhan HealthCare vs. Kweichow Moutai Co | Dezhan HealthCare vs. Beijing Roborock Technology | Dezhan 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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