Correlation Between 516220 and Nanhua Bio
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By analyzing existing cross correlation between 516220 and Nanhua Bio Medicine, you can compare the effects of market volatilities on 516220 and Nanhua Bio 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 516220 with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of 516220 and Nanhua Bio.
Diversification Opportunities for 516220 and Nanhua Bio
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 516220 and Nanhua is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding 516220 and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and 516220 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 516220 are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of 516220 i.e., 516220 and Nanhua Bio go up and down completely randomly.
Pair Corralation between 516220 and Nanhua Bio
Assuming the 90 days trading horizon 516220 is expected to under-perform the Nanhua Bio. But the etf apears to be less risky and, when comparing its historical volatility, 516220 is 2.22 times less risky than Nanhua Bio. The etf trades about 0.0 of its potential returns per unit of risk. The Nanhua Bio Medicine is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,078 in Nanhua Bio Medicine on September 12, 2024 and sell it today you would lose (28.00) from holding Nanhua Bio Medicine or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
516220 vs. Nanhua Bio Medicine
Performance |
| Timeline |
| 516220 |
| Nanhua Bio Medicine |
516220 and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 516220 and Nanhua Bio
The main advantage of trading using opposite 516220 and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 516220 position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.The idea behind 516220 and Nanhua Bio Medicine 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.| Nanhua Bio vs. Kweichow Moutai Co | Nanhua Bio vs. Shenzhen Mindray Bio Medical | Nanhua Bio vs. G bits Network Technology | Nanhua Bio vs. Beijing Roborock Technology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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