Correlation Between China Securities and Nanhua Bio
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By analyzing existing cross correlation between China Securities 800 and Nanhua Bio Medicine, you can compare the effects of market volatilities on China Securities and Nanhua Bio 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 China Securities with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Nanhua Bio.
Diversification Opportunities for China Securities and Nanhua Bio
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Nanhua is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and China Securities 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 China Securities 800 are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of China Securities i.e., China Securities and Nanhua Bio go up and down completely randomly.
Pair Corralation between China Securities and Nanhua Bio
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Nanhua Bio. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 1.89 times less risky than Nanhua Bio. The index trades about -0.01 of its potential returns per unit of risk. The Nanhua Bio Medicine is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 849.00 in Nanhua Bio Medicine on August 30, 2024 and sell it today you would earn a total of 178.00 from holding Nanhua Bio Medicine or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.44% |
| Values | Daily Returns |
China Securities 800 vs. Nanhua Bio Medicine
Performance |
| Timeline |
China Securities and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Nanhua Bio Medicine
Pair trading matchups for Nanhua Bio
Pair Trading with China Securities and Nanhua Bio
The main advantage of trading using opposite China Securities and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| China Securities vs. Tibet Huayu Mining | China Securities vs. Keeson Technology Corp | China Securities vs. OBiO Technology Corp | China Securities vs. ROPEOK Technology Group |
| Nanhua Bio vs. Yili Chuanning Biotechnology | Nanhua Bio vs. Advanced Technology Materials | Nanhua Bio vs. GRIPM Advanced Materials | Nanhua Bio vs. Guangzhou Tinci Materials |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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