Correlation Between Aba Chemicals and Yili Chuanning
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By analyzing existing cross correlation between Aba Chemicals Corp and Yili Chuanning Biotechnology, you can compare the effects of market volatilities on Aba Chemicals and Yili Chuanning 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 Aba Chemicals with a short position of Yili Chuanning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Yili Chuanning.
Diversification Opportunities for Aba Chemicals and Yili Chuanning
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Yili is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Yili Chuanning Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yili Chuanning Biote and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Yili Chuanning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yili Chuanning Biote has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Yili Chuanning go up and down completely randomly.
Pair Corralation between Aba Chemicals and Yili Chuanning
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Yili Chuanning. In addition to that, Aba Chemicals is 1.17 times more volatile than Yili Chuanning Biotechnology. It trades about -0.01 of its total potential returns per unit of risk. Yili Chuanning Biotechnology is currently generating about 0.04 per unit of volatility. If you would invest 881.00 in Yili Chuanning Biotechnology on October 12, 2024 and sell it today you would earn a total of 265.00 from holding Yili Chuanning Biotechnology or generate 30.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aba Chemicals Corp vs. Yili Chuanning Biotechnology
Performance |
Timeline |
Aba Chemicals Corp |
Yili Chuanning Biote |
Aba Chemicals and Yili Chuanning Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aba Chemicals and Yili Chuanning
The main advantage of trading using opposite Aba Chemicals and Yili Chuanning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Yili Chuanning 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 Yili Chuanning will offset losses from the drop in Yili Chuanning's long position.Aba Chemicals vs. Jiangsu Xinri E Vehicle | Aba Chemicals vs. CIMC Vehicles Co | Aba Chemicals vs. Dongfeng Automobile Co | Aba Chemicals vs. Western Mining Co |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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