Correlation Between Chengdu Kanghua and Zhongshan Broad-Ocean
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Chengdu Kanghua and Zhongshan Broad-Ocean 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 Zhongshan Broad-Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Zhongshan Broad-Ocean.
Diversification Opportunities for Chengdu Kanghua and Zhongshan Broad-Ocean
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Zhongshan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Zhongshan Broad-Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Zhongshan Broad-Ocean go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Zhongshan Broad-Ocean
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 1.92 times more return on investment than Zhongshan Broad-Ocean. However, Chengdu Kanghua is 1.92 times more volatile than Zhongshan Broad Ocean Motor. It trades about -0.06 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about -0.15 per unit of risk. If you would invest 6,038 in Chengdu Kanghua Biological on September 1, 2024 and sell it today you would lose (275.00) from holding Chengdu Kanghua Biological or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Zhongshan Broad Ocean |
Chengdu Kanghua and Zhongshan Broad-Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Zhongshan Broad-Ocean
The main advantage of trading using opposite Chengdu Kanghua and Zhongshan Broad-Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Zhongshan Broad-Ocean 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 Zhongshan Broad-Ocean will offset losses from the drop in Zhongshan Broad-Ocean's long position.| Chengdu Kanghua vs. Innovative Medical Management | Chengdu Kanghua vs. Tongyu Communication | Chengdu Kanghua vs. AVIC Fund Management | Chengdu Kanghua vs. Guangdong Shenglu Telecommunication |
| Zhongshan Broad-Ocean vs. Marssenger Kitchenware Co | Zhongshan Broad-Ocean vs. GKHT Medical Technology | Zhongshan Broad-Ocean vs. Nanjing Vishee Medical | Zhongshan Broad-Ocean vs. Xiangyu Medical 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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