Correlation Between Zhejiang Juhua and Cathay Biotech
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By analyzing existing cross correlation between Zhejiang Juhua Co and Cathay Biotech, you can compare the effects of market volatilities on Zhejiang Juhua and Cathay Biotech 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 Zhejiang Juhua with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Cathay Biotech.
Diversification Opportunities for Zhejiang Juhua and Cathay Biotech
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zhejiang and Cathay is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and Zhejiang Juhua 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 Zhejiang Juhua Co are associated (or correlated) with Cathay Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Biotech has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Cathay Biotech go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Cathay Biotech
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.61 times more return on investment than Cathay Biotech. However, Zhejiang Juhua is 1.61 times more volatile than Cathay Biotech. It trades about 0.21 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.22 per unit of risk. If you would invest 2,275 in Zhejiang Juhua Co on October 20, 2024 and sell it today you would earn a total of 262.00 from holding Zhejiang Juhua Co or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Cathay Biotech
Performance |
| Timeline |
| Zhejiang Juhua |
| Cathay Biotech |
Zhejiang Juhua and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Cathay Biotech
The main advantage of trading using opposite Zhejiang Juhua and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Cathay Biotech 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 Cathay Biotech will offset losses from the drop in Cathay Biotech's long position.| Zhejiang Juhua vs. GRIPM Advanced Materials | Zhejiang Juhua vs. Kuang Chi Technologies | Zhejiang Juhua vs. Digiwin Software Co | Zhejiang Juhua vs. Eyebright Medical Technology |
| Cathay Biotech vs. Zijin Mining Group | Cathay Biotech vs. Wanhua Chemical Group | Cathay Biotech vs. Baoshan Iron Steel | Cathay Biotech vs. Shandong Gold Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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