Correlation Between Cofco Biochemical and Liaoning Chengda
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By analyzing existing cross correlation between Cofco Biochemical Anhui and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Cofco Biochemical and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofco Biochemical and Liaoning Chengda.
Diversification Opportunities for Cofco Biochemical and Liaoning Chengda
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cofco and Liaoning is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cofco Biochemical Anhui and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Cofco Biochemical i.e., Cofco Biochemical and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Cofco Biochemical and Liaoning Chengda
Assuming the 90 days trading horizon Cofco Biochemical Anhui is expected to generate 1.18 times more return on investment than Liaoning Chengda. However, Cofco Biochemical is 1.18 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.01 of its potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.02 per unit of risk. If you would invest 678.00 in Cofco Biochemical Anhui on September 4, 2024 and sell it today you would lose (69.00) from holding Cofco Biochemical Anhui or give up 10.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cofco Biochemical Anhui vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Cofco Biochemical Anhui |
| Liaoning Chengda Bio |
Cofco Biochemical and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cofco Biochemical and Liaoning Chengda
The main advantage of trading using opposite Cofco Biochemical and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofco Biochemical position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Cofco Biochemical vs. Zijin Mining Group | Cofco Biochemical vs. Wanhua Chemical Group | Cofco Biochemical vs. Baoshan Iron Steel | Cofco Biochemical vs. Rongsheng Petrochemical Co |
| Liaoning Chengda vs. Kweichow Moutai Co | Liaoning Chengda vs. Shenzhen Mindray Bio Medical | Liaoning Chengda vs. Jiangsu Pacific Quartz | Liaoning Chengda vs. G bits Network Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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