Correlation Between Chengdu Kanghua and HanS Laser
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By analyzing existing cross correlation between Chengdu Kanghua Biological and HanS Laser Tech, you can compare the effects of market volatilities on Chengdu Kanghua and HanS Laser 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 HanS Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and HanS Laser.
Diversification Opportunities for Chengdu Kanghua and HanS Laser
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and HanS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and HanS Laser Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HanS Laser Tech 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 HanS Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HanS Laser Tech has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and HanS Laser go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and HanS Laser
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the HanS Laser. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Kanghua Biological is 1.39 times less risky than HanS Laser. The stock trades about -0.21 of its potential returns per unit of risk. The HanS Laser Tech is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,894 in HanS Laser Tech on September 12, 2024 and sell it today you would lose (184.00) from holding HanS Laser Tech or give up 6.36% 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. HanS Laser Tech
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| HanS Laser Tech |
Chengdu Kanghua and HanS Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and HanS Laser
The main advantage of trading using opposite Chengdu Kanghua and HanS Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, HanS Laser 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 HanS Laser will offset losses from the drop in HanS Laser's long position.| Chengdu Kanghua vs. Heilongjiang Publishing Media | Chengdu Kanghua vs. China Publishing Media | Chengdu Kanghua vs. Qtone Education Group | Chengdu Kanghua vs. XinJiang GuoTong Pipeline |
| HanS Laser vs. Agricultural Bank of | HanS Laser vs. Industrial and Commercial | HanS Laser vs. Bank of China | HanS Laser vs. PetroChina Co Ltd |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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