Correlation Between Chengdu Kanghua and Changchun
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Changchun UP Optotech, you can compare the effects of market volatilities on Chengdu Kanghua and Changchun 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 Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Changchun.
Diversification Opportunities for Chengdu Kanghua and Changchun
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Changchun is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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 Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Changchun go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Changchun
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Changchun. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Kanghua Biological is 1.72 times less risky than Changchun. The stock trades about -0.2 of its potential returns per unit of risk. The Changchun UP Optotech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,760 in Changchun UP Optotech on August 29, 2024 and sell it today you would earn a total of 304.00 from holding Changchun UP Optotech or generate 8.09% 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. Changchun UP Optotech
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Changchun UP Optotech |
Chengdu Kanghua and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Changchun
The main advantage of trading using opposite Chengdu Kanghua and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Chengdu Kanghua vs. Industrial and Commercial | Chengdu Kanghua vs. China Construction Bank | Chengdu Kanghua vs. Agricultural Bank of | Chengdu Kanghua vs. Bank of China |
| Changchun vs. CGN Nuclear Technology | Changchun vs. Penyao Environmental Protection | Changchun vs. GreenTech Environmental Co | Changchun vs. Kangping Technology 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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