Correlation Between Ningbo MedicalSystem and Chengdu Kanghua
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Ningbo MedicalSystem 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 Ningbo MedicalSystem with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Chengdu Kanghua.
Diversification Opportunities for Ningbo MedicalSystem and Chengdu Kanghua
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and Chengdu is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno 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 Ningbo MedicalSystem 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 Ningbo MedicalSystem Biotechnology 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 Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Chengdu Kanghua
Assuming the 90 days trading horizon Ningbo MedicalSystem Biotechnology is expected to generate 0.78 times more return on investment than Chengdu Kanghua. However, Ningbo MedicalSystem Biotechnology is 1.27 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 -0.02 per unit of risk. If you would invest 1,286 in Ningbo MedicalSystem Biotechnology on September 4, 2024 and sell it today you would lose (109.00) from holding Ningbo MedicalSystem Biotechnology or give up 8.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo MedicalSystem Biotechno vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Chengdu Kanghua Biol |
Ningbo MedicalSystem and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Chengdu Kanghua
The main advantage of trading using opposite Ningbo MedicalSystem and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem 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.| Ningbo MedicalSystem vs. Kweichow Moutai Co | Ningbo MedicalSystem vs. Shenzhen Mindray Bio Medical | Ningbo MedicalSystem vs. Jiangsu Pacific Quartz | Ningbo MedicalSystem vs. G bits Network Technology |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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