Correlation Between Fujian Wanchen and Chengdu Xinzhu
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By analyzing existing cross correlation between Fujian Wanchen Biotechnology and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Fujian Wanchen and Chengdu Xinzhu 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 Fujian Wanchen with a short position of Chengdu Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Wanchen and Chengdu Xinzhu.
Diversification Opportunities for Fujian Wanchen and Chengdu Xinzhu
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Chengdu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Wanchen Biotechnology and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge and Fujian Wanchen 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 Fujian Wanchen Biotechnology are associated (or correlated) with Chengdu Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Fujian Wanchen i.e., Fujian Wanchen and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Fujian Wanchen and Chengdu Xinzhu
Assuming the 90 days trading horizon Fujian Wanchen Biotechnology is expected to generate 1.1 times more return on investment than Chengdu Xinzhu. However, Fujian Wanchen is 1.1 times more volatile than Chengdu Xinzhu RoadBridge. It trades about 0.13 of its potential returns per unit of risk. Chengdu Xinzhu RoadBridge is currently generating about 0.09 per unit of risk. If you would invest 5,737 in Fujian Wanchen Biotechnology on October 14, 2024 and sell it today you would earn a total of 2,183 from holding Fujian Wanchen Biotechnology or generate 38.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Wanchen Biotechnology vs. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Fujian Wanchen Biote |
| Chengdu Xinzhu RoadBridge |
Fujian Wanchen and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Wanchen and Chengdu Xinzhu
The main advantage of trading using opposite Fujian Wanchen and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Wanchen position performs unexpectedly, Chengdu Xinzhu 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 Chengdu Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| Fujian Wanchen vs. Telling Telecommunication Holding | Fujian Wanchen vs. Guangdong Shenglu Telecommunication | Fujian Wanchen vs. Ningbo Jintian Copper | Fujian Wanchen vs. Shengda Mining Co |
| Chengdu Xinzhu vs. Allgens Medical Technology | Chengdu Xinzhu vs. Innovative Medical Management | Chengdu Xinzhu vs. Fujian Wanchen Biotechnology | Chengdu Xinzhu vs. Guangdong Marubi Biotechnology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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