Correlation Between Glodon Software and Cathay Biotech
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By analyzing existing cross correlation between Glodon Software Co and Cathay Biotech, you can compare the effects of market volatilities on Glodon Software 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 Glodon Software with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glodon Software and Cathay Biotech.
Diversification Opportunities for Glodon Software and Cathay Biotech
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glodon and Cathay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Glodon Software Co and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and Glodon Software 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 Glodon Software Co 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 Glodon Software i.e., Glodon Software and Cathay Biotech go up and down completely randomly.
Pair Corralation between Glodon Software and Cathay Biotech
Assuming the 90 days trading horizon Glodon Software is expected to generate 3.01 times less return on investment than Cathay Biotech. In addition to that, Glodon Software is 1.16 times more volatile than Cathay Biotech. It trades about 0.11 of its total potential returns per unit of risk. Cathay Biotech is currently generating about 0.37 per unit of volatility. If you would invest 3,876 in Cathay Biotech on November 3, 2024 and sell it today you would earn a total of 541.00 from holding Cathay Biotech or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glodon Software Co vs. Cathay Biotech
Performance |
| Timeline |
| Glodon Software |
| Cathay Biotech |
Glodon Software and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glodon Software and Cathay Biotech
The main advantage of trading using opposite Glodon Software and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glodon Software 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.| Glodon Software vs. JCHX Mining Management | Glodon Software vs. Chongqing Brewery Co | Glodon Software vs. Hainan Mining Co | Glodon Software vs. Tsingtao Brewery Co |
| Cathay Biotech vs. Nanxing Furniture Machinery | Cathay Biotech vs. Shantui Construction Machinery | Cathay Biotech vs. Tjk Machinery Tianjin | Cathay Biotech vs. Bank of Suzhou |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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