Correlation Between Chengdu Kanghua and Zhejiang Qianjiang
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Chengdu Kanghua and Zhejiang Qianjiang 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 Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Zhejiang Qianjiang.
Diversification Opportunities for Chengdu Kanghua and Zhejiang Qianjiang
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Zhejiang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang 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 Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Zhejiang Qianjiang
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 1.54 times more return on investment than Zhejiang Qianjiang. However, Chengdu Kanghua is 1.54 times more volatile than Zhejiang Qianjiang Motorcycle. It trades about 0.05 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about 0.03 per unit of risk. If you would invest 5,195 in Chengdu Kanghua Biological on August 29, 2024 and sell it today you would earn a total of 392.00 from holding Chengdu Kanghua Biological or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Zhejiang Qianjiang |
Chengdu Kanghua and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Zhejiang Qianjiang
The main advantage of trading using opposite Chengdu Kanghua and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Chengdu Kanghua vs. Shandong Sanyuan Biotechnology | Chengdu Kanghua vs. Hainan Airlines Co | Chengdu Kanghua vs. Hainan Mining Co | Chengdu Kanghua vs. Jiangsu GDK Biotechnology |
| Zhejiang Qianjiang vs. Agricultural Bank of | Zhejiang Qianjiang vs. Industrial and Commercial | Zhejiang Qianjiang vs. Bank of China | Zhejiang Qianjiang vs. China Construction Bank |
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 CEOs Directory module to screen CEOs from public companies around the world.
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