Correlation Between Shenzhen Bioeasy and Anhui Deli
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By analyzing existing cross correlation between Shenzhen Bioeasy Biotechnology and Anhui Deli Household, you can compare the effects of market volatilities on Shenzhen Bioeasy and Anhui Deli 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 Anhui Deli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Bioeasy and Anhui Deli.
Diversification Opportunities for Shenzhen Bioeasy and Anhui Deli
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Anhui is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Bioeasy Biotechnology and Anhui Deli Household in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Deli Household 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 Anhui Deli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Deli Household has no effect on the direction of Shenzhen Bioeasy i.e., Shenzhen Bioeasy and Anhui Deli go up and down completely randomly.
Pair Corralation between Shenzhen Bioeasy and Anhui Deli
Assuming the 90 days trading horizon Shenzhen Bioeasy Biotechnology is expected to generate 1.28 times more return on investment than Anhui Deli. However, Shenzhen Bioeasy is 1.28 times more volatile than Anhui Deli Household. It trades about 0.15 of its potential returns per unit of risk. Anhui Deli Household is currently generating about 0.1 per unit of risk. If you would invest 667.00 in Shenzhen Bioeasy Biotechnology on August 25, 2024 and sell it today you would earn a total of 181.00 from holding Shenzhen Bioeasy Biotechnology or generate 27.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Bioeasy Biotechnology vs. Anhui Deli Household
Performance |
| Timeline |
| Shenzhen Bioeasy Bio |
| Anhui Deli Household |
Shenzhen Bioeasy and Anhui Deli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Bioeasy and Anhui Deli
The main advantage of trading using opposite Shenzhen Bioeasy and Anhui Deli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Bioeasy position performs unexpectedly, Anhui Deli 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 Anhui Deli will offset losses from the drop in Anhui Deli's long position.The idea behind Shenzhen Bioeasy Biotechnology and Anhui Deli Household 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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