Correlation Between Chengdu Kanghua and Sichuan Fulin
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Chengdu Kanghua and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Sichuan Fulin.
Diversification Opportunities for Chengdu Kanghua and Sichuan Fulin
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Sichuan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Sichuan Fulin
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Sichuan Fulin. In addition to that, Chengdu Kanghua is 1.02 times more volatile than Sichuan Fulin Transportation. It trades about -0.01 of its total potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.01 per unit of volatility. If you would invest 755.00 in Sichuan Fulin Transportation on September 4, 2024 and sell it today you would lose (23.00) from holding Sichuan Fulin Transportation or give up 3.05% 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. Sichuan Fulin Transportation
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Sichuan Fulin Transp |
Chengdu Kanghua and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Sichuan Fulin
The main advantage of trading using opposite Chengdu Kanghua and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin'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 |
| Sichuan Fulin vs. Kweichow Moutai Co | Sichuan Fulin vs. NAURA Technology Group | Sichuan Fulin vs. Zhejiang Orient Gene | Sichuan Fulin vs. APT Medical |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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