Correlation Between Chengdu Kanghua and Shenzhen Bioeasy
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on Chengdu Kanghua and Shenzhen Bioeasy 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 Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Shenzhen Bioeasy.
Diversification Opportunities for Chengdu Kanghua and Shenzhen Bioeasy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Shenzhen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy Bio 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 Shenzhen Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Shenzhen Bioeasy
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 0.79 times more return on investment than Shenzhen Bioeasy. However, Chengdu Kanghua Biological is 1.26 times less risky than Shenzhen Bioeasy. It trades about -0.02 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about -0.03 per unit of risk. If you would invest 9,260 in Chengdu Kanghua Biological on September 3, 2024 and sell it today you would lose (3,497) from holding Chengdu Kanghua Biological or give up 37.76% 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. Shenzhen Bioeasy Biotechnology
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Shenzhen Bioeasy Bio |
Chengdu Kanghua and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Shenzhen Bioeasy
The main advantage of trading using opposite Chengdu Kanghua and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Shenzhen Bioeasy 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 Shenzhen Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.| Chengdu Kanghua vs. Chengdu Xinzhu RoadBridge | Chengdu Kanghua vs. China Life Insurance | Chengdu Kanghua vs. Shaanxi Broadcast TV | Chengdu Kanghua vs. Tianshan Aluminum Group |
| Shenzhen Bioeasy vs. Chengdu Kanghua Biological | Shenzhen Bioeasy vs. Beijing Wantai Biological | Shenzhen Bioeasy vs. Suzhou Novoprotein Scientific | Shenzhen Bioeasy vs. Aluminum Corp of |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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