Correlation Between Cofco Biochemical and Konfoong Materials
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By analyzing existing cross correlation between Cofco Biochemical Anhui and Konfoong Materials International, you can compare the effects of market volatilities on Cofco Biochemical and Konfoong Materials 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 Cofco Biochemical with a short position of Konfoong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofco Biochemical and Konfoong Materials.
Diversification Opportunities for Cofco Biochemical and Konfoong Materials
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cofco and Konfoong is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cofco Biochemical Anhui and Konfoong Materials Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konfoong Materials and Cofco Biochemical 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 Cofco Biochemical Anhui are associated (or correlated) with Konfoong Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konfoong Materials has no effect on the direction of Cofco Biochemical i.e., Cofco Biochemical and Konfoong Materials go up and down completely randomly.
Pair Corralation between Cofco Biochemical and Konfoong Materials
Assuming the 90 days trading horizon Cofco Biochemical is expected to generate 3.45 times less return on investment than Konfoong Materials. But when comparing it to its historical volatility, Cofco Biochemical Anhui is 1.78 times less risky than Konfoong Materials. It trades about 0.05 of its potential returns per unit of risk. Konfoong Materials International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,960 in Konfoong Materials International on November 2, 2024 and sell it today you would earn a total of 2,069 from holding Konfoong Materials International or generate 41.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cofco Biochemical Anhui vs. Konfoong Materials Internation
Performance |
| Timeline |
| Cofco Biochemical Anhui |
| Konfoong Materials |
Cofco Biochemical and Konfoong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cofco Biochemical and Konfoong Materials
The main advantage of trading using opposite Cofco Biochemical and Konfoong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofco Biochemical position performs unexpectedly, Konfoong Materials 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 Konfoong Materials will offset losses from the drop in Konfoong Materials' long position.| Cofco Biochemical vs. Zijin Mining Group | Cofco Biochemical vs. Wanhua Chemical Group | Cofco Biochemical vs. Baoshan Iron Steel | Cofco Biochemical vs. Shandong Gold Mining |
| Konfoong Materials vs. Linktel Technologies Co | Konfoong Materials vs. Aurora Optoelectronics Co | Konfoong Materials vs. Niutech Environment Technology | Konfoong Materials vs. Weihai Honglin Electronic |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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