Correlation Between China Resources and Chengdu Kanghua
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By analyzing existing cross correlation between China Resources Boya and Chengdu Kanghua Biological, you can compare the effects of market volatilities on China Resources and Chengdu Kanghua 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 Resources with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Chengdu Kanghua.
Diversification Opportunities for China Resources and Chengdu Kanghua
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Chengdu is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Boya and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and China Resources 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 Resources Boya are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of China Resources i.e., China Resources and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between China Resources and Chengdu Kanghua
Assuming the 90 days trading horizon China Resources Boya is expected to generate 0.8 times more return on investment than Chengdu Kanghua. However, China Resources Boya is 1.25 times less risky than Chengdu Kanghua. It trades about 0.0 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.07 per unit of risk. If you would invest 3,142 in China Resources Boya on September 4, 2024 and sell it today you would lose (10.00) from holding China Resources Boya or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Resources Boya vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| China Resources Boya |
| Chengdu Kanghua Biol |
China Resources and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Chengdu Kanghua
The main advantage of trading using opposite China Resources and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| China Resources vs. Chengdu Kanghua Biological | China Resources vs. Beijing Wantai Biological | China Resources vs. Suzhou Novoprotein Scientific | China Resources vs. Aluminum Corp of |
| Chengdu Kanghua vs. Sichuan Fulin Transportation | Chengdu Kanghua vs. Dazhong Transportation Group | Chengdu Kanghua vs. Sportsoul Co Ltd | Chengdu Kanghua vs. Sichuan Teway Food |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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