Correlation Between Chengdu Kanghua and EmbedWay TechCorp
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By analyzing existing cross correlation between Chengdu Kanghua Biological and EmbedWay TechCorp, you can compare the effects of market volatilities on Chengdu Kanghua and EmbedWay TechCorp 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 EmbedWay TechCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and EmbedWay TechCorp.
Diversification Opportunities for Chengdu Kanghua and EmbedWay TechCorp
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and EmbedWay is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and EmbedWay TechCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EmbedWay TechCorp 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 EmbedWay TechCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EmbedWay TechCorp has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and EmbedWay TechCorp go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and EmbedWay TechCorp
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the EmbedWay TechCorp. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Kanghua Biological is 1.83 times less risky than EmbedWay TechCorp. The stock trades about -0.18 of its potential returns per unit of risk. The EmbedWay TechCorp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,484 in EmbedWay TechCorp on October 17, 2024 and sell it today you would lose (89.00) from holding EmbedWay TechCorp or give up 3.58% 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. EmbedWay TechCorp
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| EmbedWay TechCorp |
Chengdu Kanghua and EmbedWay TechCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and EmbedWay TechCorp
The main advantage of trading using opposite Chengdu Kanghua and EmbedWay TechCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, EmbedWay TechCorp 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 EmbedWay TechCorp will offset losses from the drop in EmbedWay TechCorp's long position.| Chengdu Kanghua vs. Xiandai Investment Co | Chengdu Kanghua vs. Vanfund Urban Investment | Chengdu Kanghua vs. Nuode Investment Co | Chengdu Kanghua vs. Dazhong Transportation Group |
| EmbedWay TechCorp vs. Haima Automobile Group | EmbedWay TechCorp vs. Tongyu Communication | EmbedWay TechCorp vs. Chengdu Spaceon Electronics | EmbedWay TechCorp vs. Shanghai CEO Environmental |
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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