Correlation Between Caihong Display and Joincare Pharmaceutical
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By analyzing existing cross correlation between Caihong Display Devices and Joincare Pharmaceutical Group, you can compare the effects of market volatilities on Caihong Display and Joincare Pharmaceutical 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 Caihong Display with a short position of Joincare Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Joincare Pharmaceutical.
Diversification Opportunities for Caihong Display and Joincare Pharmaceutical
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caihong and Joincare is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Joincare Pharmaceutical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joincare Pharmaceutical and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Joincare Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joincare Pharmaceutical has no effect on the direction of Caihong Display i.e., Caihong Display and Joincare Pharmaceutical go up and down completely randomly.
Pair Corralation between Caihong Display and Joincare Pharmaceutical
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.57 times more return on investment than Joincare Pharmaceutical. However, Caihong Display is 1.57 times more volatile than Joincare Pharmaceutical Group. It trades about 0.05 of its potential returns per unit of risk. Joincare Pharmaceutical Group is currently generating about -0.01 per unit of risk. If you would invest 589.00 in Caihong Display Devices on September 12, 2024 and sell it today you would earn a total of 177.00 from holding Caihong Display Devices or generate 30.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Joincare Pharmaceutical Group
Performance |
| Timeline |
| Caihong Display Devices |
| Joincare Pharmaceutical |
Caihong Display and Joincare Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Joincare Pharmaceutical
The main advantage of trading using opposite Caihong Display and Joincare Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Joincare Pharmaceutical 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 Joincare Pharmaceutical will offset losses from the drop in Joincare Pharmaceutical's long position.| Caihong Display vs. Gansu Jiu Steel | Caihong Display vs. Shandong Mining Machinery | Caihong Display vs. Aba Chemicals Corp | Caihong Display vs. BlueFocus Communication Group |
| Joincare Pharmaceutical vs. Dalian Thermal Power | Joincare Pharmaceutical vs. Xinjiang Baodi Mining | Joincare Pharmaceutical vs. Shenyang Huitian Thermal | Joincare Pharmaceutical vs. Peoples Insurance of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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