Correlation Between Jiangxi Ganfeng and Cathay Biotech
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By analyzing existing cross correlation between Jiangxi Ganfeng Lithium and Cathay Biotech, you can compare the effects of market volatilities on Jiangxi Ganfeng 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 Jiangxi Ganfeng with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Ganfeng and Cathay Biotech.
Diversification Opportunities for Jiangxi Ganfeng and Cathay Biotech
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangxi and Cathay is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and Jiangxi Ganfeng 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 Jiangxi Ganfeng Lithium 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 Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Cathay Biotech go up and down completely randomly.
Pair Corralation between Jiangxi Ganfeng and Cathay Biotech
Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to generate 1.14 times more return on investment than Cathay Biotech. However, Jiangxi Ganfeng is 1.14 times more volatile than Cathay Biotech. It trades about 0.02 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.01 per unit of risk. If you would invest 3,801 in Jiangxi Ganfeng Lithium on September 14, 2024 and sell it today you would earn a total of 161.00 from holding Jiangxi Ganfeng Lithium or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Ganfeng Lithium vs. Cathay Biotech
Performance |
| Timeline |
| Jiangxi Ganfeng Lithium |
| Cathay Biotech |
Jiangxi Ganfeng and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Ganfeng and Cathay Biotech
The main advantage of trading using opposite Jiangxi Ganfeng and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Ganfeng 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.| Jiangxi Ganfeng vs. Shanghai Ziyan Foods | Jiangxi Ganfeng vs. Linewell Software Co | Jiangxi Ganfeng vs. Qingdao Foods Co | Jiangxi Ganfeng vs. Chahua Modern Housewares |
| Cathay Biotech vs. Suofeiya Home Collection | Cathay Biotech vs. Meinian Onehealth Healthcare | Cathay Biotech vs. Dezhan HealthCare Co | Cathay Biotech vs. PKU HealthCare Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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