Correlation Between China Steel and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both China Steel and Apex Biotechnology 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 China Steel and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Steel Chemical and Apex Biotechnology Corp, you can compare the effects of market volatilities on China Steel and Apex Biotechnology 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 China Steel with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Steel and Apex Biotechnology.
Diversification Opportunities for China Steel and Apex Biotechnology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Apex is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding China Steel Chemical and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and China Steel 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 China Steel Chemical are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of China Steel i.e., China Steel and Apex Biotechnology go up and down completely randomly.
Pair Corralation between China Steel and Apex Biotechnology
Assuming the 90 days trading horizon China Steel Chemical is expected to under-perform the Apex Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, China Steel Chemical is 1.68 times less risky than Apex Biotechnology. The stock trades about -0.02 of its potential returns per unit of risk. The Apex Biotechnology Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,550 in Apex Biotechnology Corp on August 26, 2024 and sell it today you would earn a total of 300.00 from holding Apex Biotechnology Corp or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Steel Chemical vs. Apex Biotechnology Corp
Performance |
| Timeline |
| China Steel Chemical |
| Apex Biotechnology Corp |
China Steel and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Steel and Apex Biotechnology
The main advantage of trading using opposite China Steel and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Steel position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| China Steel vs. Formosa Chemicals Fibre | China Steel vs. Formosa Plastics Corp | China Steel vs. Cheng Shin Rubber | China Steel vs. President Chain Store |
| Apex Biotechnology vs. Grape King Bio | Apex Biotechnology vs. Standard Chemical Pharmaceutical | Apex Biotechnology vs. China Steel Chemical | Apex Biotechnology vs. Sinphar Pharmaceutical Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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