Correlation Between Chengdu Kanghua and Zhejiang Hisoar
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Zhejiang Hisoar Pharmaceutical, you can compare the effects of market volatilities on Chengdu Kanghua and Zhejiang Hisoar 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 Hisoar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Zhejiang Hisoar.
Diversification Opportunities for Chengdu Kanghua and Zhejiang Hisoar
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Zhejiang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Zhejiang Hisoar Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Hisoar Phar 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 Hisoar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Hisoar Phar has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Zhejiang Hisoar go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Zhejiang Hisoar
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Zhejiang Hisoar. In addition to that, Chengdu Kanghua is 1.1 times more volatile than Zhejiang Hisoar Pharmaceutical. It trades about -0.02 of its total potential returns per unit of risk. Zhejiang Hisoar Pharmaceutical is currently generating about 0.0 per unit of volatility. If you would invest 751.00 in Zhejiang Hisoar Pharmaceutical on September 4, 2024 and sell it today you would lose (150.00) from holding Zhejiang Hisoar Pharmaceutical or give up 19.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Zhejiang Hisoar Pharmaceutical
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Zhejiang Hisoar Phar |
Chengdu Kanghua and Zhejiang Hisoar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Zhejiang Hisoar
The main advantage of trading using opposite Chengdu Kanghua and Zhejiang Hisoar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Zhejiang Hisoar 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 Hisoar will offset losses from the drop in Zhejiang Hisoar's long position.| Chengdu Kanghua vs. Sichuan Fulin Transportation | Chengdu Kanghua vs. Dazhong Transportation Group | Chengdu Kanghua vs. Sportsoul Co Ltd | Chengdu Kanghua vs. Sichuan Teway Food |
| Zhejiang Hisoar vs. New Hope Dairy | Zhejiang Hisoar vs. Maoming Petro Chemical Shihua | Zhejiang Hisoar vs. Shaanxi Beiyuan Chemical | Zhejiang Hisoar vs. Miracll Chemicals Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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