Correlation Between Chengdu Kanghua and Lushang Property
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Lushang Property Co, you can compare the effects of market volatilities on Chengdu Kanghua and Lushang Property 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 Lushang Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Lushang Property.
Diversification Opportunities for Chengdu Kanghua and Lushang Property
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chengdu and Lushang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Lushang Property Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lushang Property 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 Lushang Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lushang Property has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Lushang Property go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Lushang Property
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 1.15 times more return on investment than Lushang Property. However, Chengdu Kanghua is 1.15 times more volatile than Lushang Property Co. It trades about -0.02 of its potential returns per unit of risk. Lushang Property Co is currently generating about -0.03 per unit of risk. If you would invest 9,011 in Chengdu Kanghua Biological on August 28, 2024 and sell it today you would lose (3,417) from holding Chengdu Kanghua Biological or give up 37.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Lushang Property Co
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Lushang Property |
Chengdu Kanghua and Lushang Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Lushang Property
The main advantage of trading using opposite Chengdu Kanghua and Lushang Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Lushang Property 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 Lushang Property will offset losses from the drop in Lushang Property's long position.| Chengdu Kanghua vs. Henzhen Zhaowei Machinery | Chengdu Kanghua vs. Jiangsu Xinri E Vehicle | Chengdu Kanghua vs. Huasi Agricultural Development | Chengdu Kanghua vs. Hunan Tyen Machinery |
| Lushang Property vs. Industrial and Commercial | Lushang Property vs. China Construction Bank | Lushang Property vs. Bank of China | Lushang Property vs. Agricultural Bank 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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