Correlation Between Chengdu Kanghua and Jiangsu GDK
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Chengdu Kanghua and Jiangsu GDK 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 Jiangsu GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Jiangsu GDK.
Diversification Opportunities for Chengdu Kanghua and Jiangsu GDK
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Jiangsu is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Jiangsu GDK Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu GDK Biotechnology 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 Jiangsu GDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu GDK Biotechnology has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Jiangsu GDK
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 0.8 times more return on investment than Jiangsu GDK. However, Chengdu Kanghua Biological is 1.24 times less risky than Jiangsu GDK. It trades about -0.02 of its potential returns per unit of risk. Jiangsu GDK Biotechnology is currently generating about -0.02 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. Jiangsu GDK Biotechnology
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Jiangsu GDK Biotechnology |
Chengdu Kanghua and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Jiangsu GDK
The main advantage of trading using opposite Chengdu Kanghua and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Jiangsu GDK 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 Jiangsu GDK will offset losses from the drop in Jiangsu GDK'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 |
| Jiangsu GDK vs. Chengdu Kanghua Biological | Jiangsu GDK vs. Beijing Wantai Biological | Jiangsu GDK vs. Suzhou Novoprotein Scientific | Jiangsu GDK 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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