Correlation Between Chengdu Kanghua and Weihai Honglin
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Weihai Honglin Electronic, you can compare the effects of market volatilities on Chengdu Kanghua and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Weihai Honglin.
Diversification Opportunities for Chengdu Kanghua and Weihai Honglin
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Weihai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Weihai Honglin go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Weihai Honglin
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Weihai Honglin. In addition to that, Chengdu Kanghua is 1.43 times more volatile than Weihai Honglin Electronic. It trades about -0.2 of its total potential returns per unit of risk. Weihai Honglin Electronic is currently generating about -0.18 per unit of volatility. If you would invest 1,473 in Weihai Honglin Electronic on August 28, 2024 and sell it today you would lose (124.00) from holding Weihai Honglin Electronic or give up 8.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Weihai Honglin Electronic |
Chengdu Kanghua and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Weihai Honglin
The main advantage of trading using opposite Chengdu Kanghua and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Chengdu Kanghua vs. Industrial and Commercial | Chengdu Kanghua vs. China Construction Bank | Chengdu Kanghua vs. Agricultural Bank of | Chengdu Kanghua vs. Bank of China |
| Weihai Honglin vs. Kweichow Moutai Co | Weihai Honglin vs. Shenzhen Mindray Bio Medical | Weihai Honglin vs. Jiangsu Pacific Quartz | Weihai Honglin vs. G bits Network Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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