Correlation Between China World and Shenzhen Bioeasy
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By analyzing existing cross correlation between China World Trade and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on China World and Shenzhen Bioeasy 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 China World with a short position of Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Shenzhen Bioeasy.
Diversification Opportunities for China World and Shenzhen Bioeasy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Shenzhen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy Bio and China World 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 China World Trade are associated (or correlated) with Shenzhen Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of China World i.e., China World and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between China World and Shenzhen Bioeasy
Assuming the 90 days trading horizon China World Trade is expected to generate 0.43 times more return on investment than Shenzhen Bioeasy. However, China World Trade is 2.33 times less risky than Shenzhen Bioeasy. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about -0.07 per unit of risk. If you would invest 2,446 in China World Trade on November 1, 2024 and sell it today you would earn a total of 50.00 from holding China World Trade or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. Shenzhen Bioeasy Biotechnology
Performance |
| Timeline |
| China World Trade |
| Shenzhen Bioeasy Bio |
China World and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Shenzhen Bioeasy
The main advantage of trading using opposite China World and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, Shenzhen Bioeasy 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 Shenzhen Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.| China World vs. New Hope Dairy | China World vs. Jiajia Food Group | China World vs. Hefei Metalforming Mach | China World vs. Guangdong Jingyi Metal |
| Shenzhen Bioeasy vs. Nuode Investment Co | Shenzhen Bioeasy vs. HeBei Jinniu Chemical | Shenzhen Bioeasy vs. Xiangtan Electrochemical Scientific | Shenzhen Bioeasy vs. Lianhe Chemical 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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