Correlation Between LianChuang Electronic and Cathay Biotech
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By analyzing existing cross correlation between LianChuang Electronic Technology and Cathay Biotech, you can compare the effects of market volatilities on LianChuang Electronic 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 LianChuang Electronic with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianChuang Electronic and Cathay Biotech.
Diversification Opportunities for LianChuang Electronic and Cathay Biotech
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LianChuang and Cathay is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding LianChuang Electronic Technolo and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and LianChuang Electronic 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 LianChuang Electronic Technology 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 LianChuang Electronic i.e., LianChuang Electronic and Cathay Biotech go up and down completely randomly.
Pair Corralation between LianChuang Electronic and Cathay Biotech
Assuming the 90 days trading horizon LianChuang Electronic Technology is expected to generate 1.42 times more return on investment than Cathay Biotech. However, LianChuang Electronic is 1.42 times more volatile than Cathay Biotech. It trades about -0.01 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.03 per unit of risk. If you would invest 1,385 in LianChuang Electronic Technology on October 25, 2024 and sell it today you would lose (475.00) from holding LianChuang Electronic Technology or give up 34.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LianChuang Electronic Technolo vs. Cathay Biotech
Performance |
| Timeline |
| LianChuang Electronic |
| Cathay Biotech |
LianChuang Electronic and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianChuang Electronic and Cathay Biotech
The main advantage of trading using opposite LianChuang Electronic and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianChuang Electronic 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.| LianChuang Electronic vs. Shuhua Sports Co | LianChuang Electronic vs. Heilongjiang Publishing Media | LianChuang Electronic vs. Southern PublishingMedia Co | LianChuang Electronic vs. Sportsoul Co Ltd |
| Cathay Biotech vs. Digiwin Software Co | Cathay Biotech vs. Bangyan Technology Co | Cathay Biotech vs. Dhc Software Co | Cathay Biotech vs. Jiujiang Shanshui 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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