Correlation Between Shenzhen Bioeasy and CGN Nuclear
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By analyzing existing cross correlation between Shenzhen Bioeasy Biotechnology and CGN Nuclear Technology, you can compare the effects of market volatilities on Shenzhen Bioeasy and CGN Nuclear 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 Shenzhen Bioeasy with a short position of CGN Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Bioeasy and CGN Nuclear.
Diversification Opportunities for Shenzhen Bioeasy and CGN Nuclear
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and CGN is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Bioeasy Biotechnology and CGN Nuclear Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Nuclear Technology and Shenzhen Bioeasy 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 Shenzhen Bioeasy Biotechnology are associated (or correlated) with CGN Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Nuclear Technology has no effect on the direction of Shenzhen Bioeasy i.e., Shenzhen Bioeasy and CGN Nuclear go up and down completely randomly.
Pair Corralation between Shenzhen Bioeasy and CGN Nuclear
Assuming the 90 days trading horizon Shenzhen Bioeasy Biotechnology is expected to under-perform the CGN Nuclear. In addition to that, Shenzhen Bioeasy is 1.54 times more volatile than CGN Nuclear Technology. It trades about -0.05 of its total potential returns per unit of risk. CGN Nuclear Technology is currently generating about 0.01 per unit of volatility. If you would invest 846.00 in CGN Nuclear Technology on August 25, 2024 and sell it today you would lose (54.00) from holding CGN Nuclear Technology or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shenzhen Bioeasy Biotechnology vs. CGN Nuclear Technology
Performance |
| Timeline |
| Shenzhen Bioeasy Bio |
| CGN Nuclear Technology |
Shenzhen Bioeasy and CGN Nuclear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Bioeasy and CGN Nuclear
The main advantage of trading using opposite Shenzhen Bioeasy and CGN Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Bioeasy position performs unexpectedly, CGN Nuclear 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 CGN Nuclear will offset losses from the drop in CGN Nuclear's long position.The idea behind Shenzhen Bioeasy Biotechnology and CGN Nuclear Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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