Correlation Between Chengdu Kanghua and China Reform
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By analyzing existing cross correlation between Chengdu Kanghua Biological and China Reform Health, you can compare the effects of market volatilities on Chengdu Kanghua and China Reform 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 Chengdu Kanghua with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and China Reform.
Diversification Opportunities for Chengdu Kanghua and China Reform
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Chengdu Kanghua 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 Chengdu Kanghua Biological are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and China Reform go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and China Reform
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 0.93 times more return on investment than China Reform. However, Chengdu Kanghua Biological is 1.07 times less risky than China Reform. It trades about -0.22 of its potential returns per unit of risk. China Reform Health is currently generating about -0.37 per unit of risk. If you would invest 5,671 in Chengdu Kanghua Biological on October 24, 2024 and sell it today you would lose (513.00) from holding Chengdu Kanghua Biological or give up 9.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. China Reform Health
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| China Reform Health |
Chengdu Kanghua and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and China Reform
The main advantage of trading using opposite Chengdu Kanghua and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, China Reform 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 China Reform will offset losses from the drop in China Reform's long position.| Chengdu Kanghua vs. Guangzhou Automobile Group | Chengdu Kanghua vs. Tongyu Communication | Chengdu Kanghua vs. Zhejiang JIULI Hi tech | Chengdu Kanghua vs. Changchun Engley Automobile |
| China Reform vs. Servyou Software Group | China Reform vs. Mango Excellent Media | China Reform vs. Shuhua Sports Co | China Reform vs. China National Software |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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