Correlation Between Chengdu Kanghua and Liaoning Chengda
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Chengdu Kanghua and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Liaoning Chengda.
Diversification Opportunities for Chengdu Kanghua and Liaoning Chengda
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chengdu and Liaoning is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Liaoning Chengda
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 1.62 times more return on investment than Liaoning Chengda. However, Chengdu Kanghua is 1.62 times more volatile than Liaoning Chengda Biotechnology. It trades about 0.02 of its potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about 0.03 per unit of risk. If you would invest 5,678 in Chengdu Kanghua Biological on September 3, 2024 and sell it today you would earn a total of 85.00 from holding Chengdu Kanghua Biological or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Liaoning Chengda Bio |
Chengdu Kanghua and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Liaoning Chengda
The main advantage of trading using opposite Chengdu Kanghua and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda'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 |
| Liaoning Chengda vs. Chengdu Kanghua Biological | Liaoning Chengda vs. Beijing Wantai Biological | Liaoning Chengda vs. Suzhou Novoprotein Scientific | Liaoning Chengda 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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