Correlation Between China Securities and Cathay Biotech
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By analyzing existing cross correlation between China Securities 800 and Cathay Biotech, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Cathay Biotech.
Diversification Opportunities for China Securities and Cathay Biotech
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Cathay is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech 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 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 China Securities i.e., China Securities and Cathay Biotech go up and down completely randomly.
Pair Corralation between China Securities and Cathay Biotech
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.5 times more return on investment than Cathay Biotech. However, China Securities 800 is 2.01 times less risky than Cathay Biotech. It trades about 0.06 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.01 per unit of risk. If you would invest 367,961 in China Securities 800 on September 14, 2024 and sell it today you would earn a total of 69,201 from holding China Securities 800 or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Cathay Biotech
Performance |
| Timeline |
China Securities and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Cathay Biotech
Pair trading matchups for Cathay Biotech
Pair Trading with China Securities and Cathay Biotech
The main advantage of trading using opposite China Securities and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. King Strong New Material | China Securities vs. Zhejiang Xiantong RubberPlastic | China Securities vs. Hangzhou Gaoxin Rubber | China Securities vs. Chongqing Sulian Plastic |
| Cathay Biotech vs. Suofeiya Home Collection | Cathay Biotech vs. Meinian Onehealth Healthcare | Cathay Biotech vs. Dezhan HealthCare Co | Cathay Biotech vs. PKU HealthCare Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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