Correlation Between GeneReach Biotechnology and Cheng Mei
Can any of the company-specific risk be diversified away by investing in both GeneReach Biotechnology and Cheng Mei at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GeneReach Biotechnology and Cheng Mei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeneReach Biotechnology and Cheng Mei Materials, you can compare the effects of market volatilities on GeneReach Biotechnology and Cheng Mei 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 GeneReach Biotechnology with a short position of Cheng Mei. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeneReach Biotechnology and Cheng Mei.
Diversification Opportunities for GeneReach Biotechnology and Cheng Mei
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GeneReach and Cheng is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GeneReach Biotechnology and Cheng Mei Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheng Mei Materials and GeneReach Biotechnology 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 GeneReach Biotechnology are associated (or correlated) with Cheng Mei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheng Mei Materials has no effect on the direction of GeneReach Biotechnology i.e., GeneReach Biotechnology and Cheng Mei go up and down completely randomly.
Pair Corralation between GeneReach Biotechnology and Cheng Mei
Assuming the 90 days trading horizon GeneReach Biotechnology is expected to generate 2.13 times more return on investment than Cheng Mei. However, GeneReach Biotechnology is 2.13 times more volatile than Cheng Mei Materials. It trades about 0.36 of its potential returns per unit of risk. Cheng Mei Materials is currently generating about 0.07 per unit of risk. If you would invest 2,580 in GeneReach Biotechnology on October 15, 2024 and sell it today you would earn a total of 355.00 from holding GeneReach Biotechnology or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GeneReach Biotechnology vs. Cheng Mei Materials
Performance |
| Timeline |
| GeneReach Biotechnology |
| Cheng Mei Materials |
GeneReach Biotechnology and Cheng Mei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeneReach Biotechnology and Cheng Mei
The main advantage of trading using opposite GeneReach Biotechnology and Cheng Mei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeneReach Biotechnology position performs unexpectedly, Cheng Mei 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 Cheng Mei will offset losses from the drop in Cheng Mei's long position.| GeneReach Biotechnology vs. EirGenix | GeneReach Biotechnology vs. Medigen Vaccine Biologics | GeneReach Biotechnology vs. OBI Pharma | GeneReach Biotechnology vs. TaiMed Biologics |
| Cheng Mei vs. Healthconn Corp | Cheng Mei vs. GeneReach Biotechnology | Cheng Mei vs. TWOWAY Communications | Cheng Mei vs. Sunmax Biotechnology Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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