Correlation Between Chailease Holding and Sunmax Biotechnology
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Sunmax 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 Chailease Holding and Sunmax Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chailease Holding Co and Sunmax Biotechnology Co, you can compare the effects of market volatilities on Chailease Holding and Sunmax 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 Chailease Holding with a short position of Sunmax Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Sunmax Biotechnology.
Diversification Opportunities for Chailease Holding and Sunmax Biotechnology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chailease and Sunmax is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax Biotechnology and Chailease Holding 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 Chailease Holding Co are associated (or correlated) with Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of Chailease Holding i.e., Chailease Holding and Sunmax Biotechnology go up and down completely randomly.
Pair Corralation between Chailease Holding and Sunmax Biotechnology
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Sunmax Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Chailease Holding Co is 1.07 times less risky than Sunmax Biotechnology. The stock trades about -0.08 of its potential returns per unit of risk. The Sunmax Biotechnology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19,906 in Sunmax Biotechnology Co on September 2, 2024 and sell it today you would earn a total of 7,894 from holding Sunmax Biotechnology Co or generate 39.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chailease Holding Co vs. Sunmax Biotechnology Co
Performance |
| Timeline |
| Chailease Holding |
| Sunmax Biotechnology |
Chailease Holding and Sunmax Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Sunmax Biotechnology
The main advantage of trading using opposite Chailease Holding and Sunmax Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Sunmax 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 Sunmax Biotechnology will offset losses from the drop in Sunmax Biotechnology's long position.The idea behind Chailease Holding Co and Sunmax 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.| Sunmax Biotechnology vs. Medigen Vaccine Biologics | Sunmax Biotechnology vs. TaiMed Biologics | Sunmax Biotechnology vs. Adimmune Corp | Sunmax Biotechnology vs. PharmaEngine |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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