Correlation Between Qingdao Foods and Shenzhen Bioeasy
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By analyzing existing cross correlation between Qingdao Foods Co and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on Qingdao Foods and Shenzhen Bioeasy 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 Qingdao Foods with a short position of Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Shenzhen Bioeasy.
Diversification Opportunities for Qingdao Foods and Shenzhen Bioeasy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qingdao and Shenzhen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy Bio and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Shenzhen Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between Qingdao Foods and Shenzhen Bioeasy
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 0.54 times more return on investment than Shenzhen Bioeasy. However, Qingdao Foods Co is 1.84 times less risky than Shenzhen Bioeasy. It trades about 0.07 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about 0.0 per unit of risk. If you would invest 1,303 in Qingdao Foods Co on November 7, 2024 and sell it today you would earn a total of 22.00 from holding Qingdao Foods Co or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Shenzhen Bioeasy Biotechnology
Performance |
| Timeline |
| Qingdao Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Bioeasy Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Qingdao Foods and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Shenzhen Bioeasy
The main advantage of trading using opposite Qingdao Foods and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Shenzhen Bioeasy 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 Shenzhen Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.The idea behind Qingdao Foods Co and Shenzhen Bioeasy Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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