Correlation Between Changchun and Shenzhen Bioeasy
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By analyzing existing cross correlation between Changchun UP Optotech and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on Changchun 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 Changchun with a short position of Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shenzhen Bioeasy.
Diversification Opportunities for Changchun and Shenzhen Bioeasy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Shenzhen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech 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 Changchun 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 Changchun UP Optotech 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 Changchun i.e., Changchun and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between Changchun and Shenzhen Bioeasy
Assuming the 90 days trading horizon Changchun is expected to generate 1.91 times less return on investment than Shenzhen Bioeasy. But when comparing it to its historical volatility, Changchun UP Optotech is 1.04 times less risky than Shenzhen Bioeasy. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 888.00 in Shenzhen Bioeasy Biotechnology on August 29, 2024 and sell it today you would earn a total of 167.00 from holding Shenzhen Bioeasy Biotechnology or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shenzhen Bioeasy Biotechnology
Performance |
| Timeline |
| Changchun UP Optotech |
| Shenzhen Bioeasy Bio |
Changchun and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shenzhen Bioeasy
The main advantage of trading using opposite Changchun and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun 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.| Changchun vs. PetroChina Co Ltd | Changchun vs. China State Construction | Changchun vs. China Mobile Limited | Changchun vs. Industrial and Commercial |
| Shenzhen Bioeasy vs. Industrial and Commercial | Shenzhen Bioeasy vs. China Construction Bank | Shenzhen Bioeasy vs. Agricultural Bank of | Shenzhen Bioeasy vs. Bank of China |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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