Correlation Between Chengdu Kanghua and Yingde Greatchem
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Chengdu Kanghua and Yingde Greatchem 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 Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Yingde Greatchem.
Diversification Opportunities for Chengdu Kanghua and Yingde Greatchem
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Yingde is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che 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 Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Yingde Greatchem
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Yingde Greatchem. In addition to that, Chengdu Kanghua is 1.23 times more volatile than Yingde Greatchem Chemicals. It trades about -0.07 of its total potential returns per unit of risk. Yingde Greatchem Chemicals is currently generating about 0.09 per unit of volatility. If you would invest 2,473 in Yingde Greatchem Chemicals on September 5, 2024 and sell it today you would earn a total of 92.00 from holding Yingde Greatchem Chemicals or generate 3.72% 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. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Yingde Greatchem Che |
Chengdu Kanghua and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Yingde Greatchem
The main advantage of trading using opposite Chengdu Kanghua and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem'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 |
| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Rongsheng Petrochemical 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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