Correlation Between Chengdu Kanghua and COL Digital
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By analyzing existing cross correlation between Chengdu Kanghua Biological and COL Digital Publishing, you can compare the effects of market volatilities on Chengdu Kanghua and COL Digital 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 COL Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and COL Digital.
Diversification Opportunities for Chengdu Kanghua and COL Digital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and COL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and COL Digital Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Digital Publishing 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 COL Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Digital Publishing has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and COL Digital go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and COL Digital
Assuming the 90 days trading horizon Chengdu Kanghua is expected to generate 3.47 times less return on investment than COL Digital. But when comparing it to its historical volatility, Chengdu Kanghua Biological is 1.36 times less risky than COL Digital. It trades about 0.02 of its potential returns per unit of risk. COL Digital Publishing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,956 in COL Digital Publishing on October 26, 2024 and sell it today you would earn a total of 453.00 from holding COL Digital Publishing or generate 23.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. COL Digital Publishing
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| COL Digital Publishing |
Chengdu Kanghua and COL Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and COL Digital
The main advantage of trading using opposite Chengdu Kanghua and COL Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, COL Digital 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 COL Digital will offset losses from the drop in COL Digital's long position.| Chengdu Kanghua vs. ROPEOK Technology Group | Chengdu Kanghua vs. Shantou Wanshun Package | Chengdu Kanghua vs. Holitech Technology Co | Chengdu Kanghua vs. Shanghai Ziyan Foods |
| COL Digital vs. Highbroad Advanced Material | COL Digital vs. Jiangyin Jianghua Microelectronics | COL Digital vs. Road Environment Technology | COL Digital vs. Guangdong Ellington Electronics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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