Correlation Between Yingde Greatchem and Chengdu Kanghua
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Yingde Greatchem 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 Yingde Greatchem with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Chengdu Kanghua.
Diversification Opportunities for Yingde Greatchem and Chengdu Kanghua
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yingde and Chengdu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals 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 Yingde Greatchem 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 Yingde Greatchem Chemicals 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 Yingde Greatchem i.e., Yingde Greatchem and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Chengdu Kanghua
Assuming the 90 days trading horizon Yingde Greatchem Chemicals is expected to generate 0.94 times more return on investment than Chengdu Kanghua. However, Yingde Greatchem Chemicals is 1.06 times less risky than Chengdu Kanghua. It trades about 0.04 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.26 per unit of risk. If you would invest 2,558 in Yingde Greatchem Chemicals on September 13, 2024 and sell it today you would earn a total of 39.00 from holding Yingde Greatchem Chemicals or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Yingde Greatchem Che |
| Chengdu Kanghua Biol |
Yingde Greatchem and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Chengdu Kanghua
The main advantage of trading using opposite Yingde Greatchem and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem 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.| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Shandong Gold Mining |
| Chengdu Kanghua vs. Bank of Suzhou | Chengdu Kanghua vs. Peoples Insurance of | Chengdu Kanghua vs. Yonyou Auto Information | Chengdu Kanghua vs. Longmaster Information Tech |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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