Correlation Between COFCO Joycome and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and WUXI BIOLOGICS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining COFCO Joycome and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on COFCO Joycome and WUXI BIOLOGICS 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 COFCO Joycome with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and WUXI BIOLOGICS.
Diversification Opportunities for COFCO Joycome and WUXI BIOLOGICS
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between COFCO and WUXI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between COFCO Joycome and WUXI BIOLOGICS
Assuming the 90 days horizon COFCO Joycome Foods is expected to generate 0.82 times more return on investment than WUXI BIOLOGICS. However, COFCO Joycome Foods is 1.22 times less risky than WUXI BIOLOGICS. It trades about -0.01 of its potential returns per unit of risk. WUXI BIOLOGICS UNSPADR2 is currently generating about -0.03 per unit of risk. If you would invest 26.00 in COFCO Joycome Foods on September 23, 2024 and sell it today you would lose (9.00) from holding COFCO Joycome Foods or give up 34.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| COFCO Joycome Foods |
| WUXI BIOLOGICS UNSPADR2 |
COFCO Joycome and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and WUXI BIOLOGICS
The main advantage of trading using opposite COFCO Joycome and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| COFCO Joycome vs. Mowi ASA | COFCO Joycome vs. LEROY SEAFOOD GRUNSPADR | COFCO Joycome vs. Lery Seafood Group | COFCO Joycome vs. Nisshin Seifun Group |
| WUXI BIOLOGICS vs. COFCO Joycome Foods | WUXI BIOLOGICS vs. LIFEWAY FOODS | WUXI BIOLOGICS vs. INTER CARS SA | WUXI BIOLOGICS vs. Cal Maine Foods |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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