Correlation Between Chengdu Kanghua and Gansu Huangtai
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Chengdu Kanghua and Gansu Huangtai 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 Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Gansu Huangtai.
Diversification Opportunities for Chengdu Kanghua and Gansu Huangtai
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Gansu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine 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 Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Gansu Huangtai
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Gansu Huangtai. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Kanghua Biological is 1.24 times less risky than Gansu Huangtai. The stock trades about -0.2 of its potential returns per unit of risk. The Gansu Huangtai Wine marketing is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,381 in Gansu Huangtai Wine marketing on August 28, 2024 and sell it today you would lose (36.00) from holding Gansu Huangtai Wine marketing or give up 2.61% 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. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Gansu Huangtai Wine |
Chengdu Kanghua and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Gansu Huangtai
The main advantage of trading using opposite Chengdu Kanghua and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.| Chengdu Kanghua vs. Henzhen Zhaowei Machinery | Chengdu Kanghua vs. Jiangsu Xinri E Vehicle | Chengdu Kanghua vs. Huasi Agricultural Development | Chengdu Kanghua vs. Hunan Tyen Machinery |
| Gansu Huangtai vs. Industrial and Commercial | Gansu Huangtai vs. China Construction Bank | Gansu Huangtai vs. Bank of China | Gansu Huangtai vs. Agricultural Bank of |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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