Correlation Between Chengdu Kanghua and Guangdong Jinming
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Guangdong Jinming Machinery, you can compare the effects of market volatilities on Chengdu Kanghua and Guangdong Jinming 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 Guangdong Jinming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Guangdong Jinming.
Diversification Opportunities for Chengdu Kanghua and Guangdong Jinming
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Guangdong is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Guangdong Jinming Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jinming 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 Guangdong Jinming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jinming has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Guangdong Jinming go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Guangdong Jinming
Assuming the 90 days trading horizon Chengdu Kanghua is expected to generate 5.34 times less return on investment than Guangdong Jinming. But when comparing it to its historical volatility, Chengdu Kanghua Biological is 1.39 times less risky than Guangdong Jinming. It trades about 0.03 of its potential returns per unit of risk. Guangdong Jinming Machinery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 428.00 in Guangdong Jinming Machinery on September 5, 2024 and sell it today you would earn a total of 267.00 from holding Guangdong Jinming Machinery or generate 62.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Guangdong Jinming Machinery
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Guangdong Jinming |
Chengdu Kanghua and Guangdong Jinming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Guangdong Jinming
The main advantage of trading using opposite Chengdu Kanghua and Guangdong Jinming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Guangdong Jinming 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 Guangdong Jinming will offset losses from the drop in Guangdong Jinming's long position.| Chengdu Kanghua vs. Yingde Greatchem Chemicals | Chengdu Kanghua vs. Guangdong Jingyi Metal | Chengdu Kanghua vs. Aluminum Corp of | Chengdu Kanghua vs. YLZ Information Tech |
| Guangdong Jinming vs. Dongguan Tarry Electronics | Guangdong Jinming vs. Cofoe Medical Technology | Guangdong Jinming vs. Integrated Electronic Systems | Guangdong Jinming vs. Jafron Biomedical 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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