Correlation Between Yuan High and Genovate Biotechnology
Can any of the company-specific risk be diversified away by investing in both Yuan High and Genovate Biotechnology 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 Yuan High and Genovate Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuan High Tech Development and Genovate Biotechnology Co, you can compare the effects of market volatilities on Yuan High and Genovate Biotechnology 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 Yuan High with a short position of Genovate Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan High and Genovate Biotechnology.
Diversification Opportunities for Yuan High and Genovate Biotechnology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuan and Genovate is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Yuan High Tech Development and Genovate Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovate Biotechnology and Yuan High 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 Yuan High Tech Development are associated (or correlated) with Genovate Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovate Biotechnology has no effect on the direction of Yuan High i.e., Yuan High and Genovate Biotechnology go up and down completely randomly.
Pair Corralation between Yuan High and Genovate Biotechnology
Assuming the 90 days trading horizon Yuan High Tech Development is expected to under-perform the Genovate Biotechnology. In addition to that, Yuan High is 1.16 times more volatile than Genovate Biotechnology Co. It trades about -0.05 of its total potential returns per unit of risk. Genovate Biotechnology Co is currently generating about 0.2 per unit of volatility. If you would invest 2,090 in Genovate Biotechnology Co on November 7, 2024 and sell it today you would earn a total of 235.00 from holding Genovate Biotechnology Co or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan High Tech Development vs. Genovate Biotechnology Co
Performance |
| Timeline |
| Yuan High Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Genovate Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Yuan High and Genovate Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan High and Genovate Biotechnology
The main advantage of trading using opposite Yuan High and Genovate Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan High position performs unexpectedly, Genovate Biotechnology 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 Genovate Biotechnology will offset losses from the drop in Genovate Biotechnology's long position.The idea behind Yuan High Tech Development and Genovate Biotechnology Co 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.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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