Correlation Between Chengdu Kanghua and Sino Medical
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Sino Medical Sciences, you can compare the effects of market volatilities on Chengdu Kanghua and Sino Medical 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 Sino Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Sino Medical.
Diversification Opportunities for Chengdu Kanghua and Sino Medical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Sino is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Sino Medical Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Medical Sciences 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 Sino Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Medical Sciences has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Sino Medical go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Sino Medical
Assuming the 90 days trading horizon Chengdu Kanghua is expected to generate 1.47 times less return on investment than Sino Medical. In addition to that, Chengdu Kanghua is 1.14 times more volatile than Sino Medical Sciences. It trades about 0.06 of its total potential returns per unit of risk. Sino Medical Sciences is currently generating about 0.11 per unit of volatility. If you would invest 874.00 in Sino Medical Sciences on September 3, 2024 and sell it today you would earn a total of 212.00 from holding Sino Medical Sciences or generate 24.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Sino Medical Sciences
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Sino Medical Sciences |
Chengdu Kanghua and Sino Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Sino Medical
The main advantage of trading using opposite Chengdu Kanghua and Sino Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Sino Medical 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 Sino Medical will offset losses from the drop in Sino Medical'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 |
| Sino Medical vs. Chengdu Kanghua Biological | Sino Medical vs. Beijing Wantai Biological | Sino Medical vs. Suzhou Novoprotein Scientific | Sino Medical 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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