Correlation Between Kangxin New and Huadong Medicine
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By analyzing existing cross correlation between Kangxin New Materials and Huadong Medicine Co, you can compare the effects of market volatilities on Kangxin New and Huadong Medicine 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 Kangxin New with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangxin New and Huadong Medicine.
Diversification Opportunities for Kangxin New and Huadong Medicine
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kangxin and Huadong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kangxin New Materials and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Kangxin New 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 Kangxin New Materials are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Kangxin New i.e., Kangxin New and Huadong Medicine go up and down completely randomly.
Pair Corralation between Kangxin New and Huadong Medicine
Assuming the 90 days trading horizon Kangxin New Materials is expected to generate 1.84 times more return on investment than Huadong Medicine. However, Kangxin New is 1.84 times more volatile than Huadong Medicine Co. It trades about 0.02 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of risk. If you would invest 188.00 in Kangxin New Materials on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Kangxin New Materials or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kangxin New Materials vs. Huadong Medicine Co
Performance |
| Timeline |
| Kangxin New Materials |
| Huadong Medicine |
Kangxin New and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kangxin New and Huadong Medicine
The main advantage of trading using opposite Kangxin New and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangxin New position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Kangxin New vs. Miracll Chemicals Co | Kangxin New vs. Guangzhou Tinci Materials | Kangxin New vs. Dosilicon Co | Kangxin New vs. Ningxia Building Materials |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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