Correlation Between Yili Chuanning and Zai Lab
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By analyzing existing cross correlation between Yili Chuanning Biotechnology and Zai Lab, you can compare the effects of market volatilities on Yili Chuanning and Zai Lab 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 Yili Chuanning with a short position of Zai Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yili Chuanning and Zai Lab.
Diversification Opportunities for Yili Chuanning and Zai Lab
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yili and Zai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yili Chuanning Biotechnology and Zai Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zai Lab and Yili Chuanning 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 Yili Chuanning Biotechnology are associated (or correlated) with Zai Lab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zai Lab has no effect on the direction of Yili Chuanning i.e., Yili Chuanning and Zai Lab go up and down completely randomly.
Pair Corralation between Yili Chuanning and Zai Lab
Assuming the 90 days trading horizon Yili Chuanning Biotechnology is expected to generate 0.77 times more return on investment than Zai Lab. However, Yili Chuanning Biotechnology is 1.3 times less risky than Zai Lab. It trades about 0.04 of its potential returns per unit of risk. Zai Lab is currently generating about 0.03 per unit of risk. If you would invest 898.00 in Yili Chuanning Biotechnology on December 11, 2024 and sell it today you would earn a total of 415.00 from holding Yili Chuanning Biotechnology or generate 46.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.15% |
| Values | Daily Returns |
Yili Chuanning Biotechnology vs. Zai Lab
Performance |
| Timeline |
| Yili Chuanning Biote |
| Zai Lab |
Yili Chuanning and Zai Lab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yili Chuanning and Zai Lab
The main advantage of trading using opposite Yili Chuanning and Zai Lab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yili Chuanning position performs unexpectedly, Zai Lab 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 Zai Lab will offset losses from the drop in Zai Lab's long position.| Yili Chuanning vs. Heilongjiang Publishing Media | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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