Correlation Between Caihong Display and Allgens Medical
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By analyzing existing cross correlation between Caihong Display Devices and Allgens Medical Technology, you can compare the effects of market volatilities on Caihong Display and Allgens Medical 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 Allgens Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Allgens Medical.
Diversification Opportunities for Caihong Display and Allgens Medical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caihong and Allgens is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Allgens Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allgens Medical Tech 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 Allgens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allgens Medical Tech has no effect on the direction of Caihong Display i.e., Caihong Display and Allgens Medical go up and down completely randomly.
Pair Corralation between Caihong Display and Allgens Medical
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 0.9 times more return on investment than Allgens Medical. However, Caihong Display Devices is 1.11 times less risky than Allgens Medical. It trades about 0.06 of its potential returns per unit of risk. Allgens Medical Technology is currently generating about -0.02 per unit of risk. If you would invest 463.00 in Caihong Display Devices on October 12, 2024 and sell it today you would earn a total of 357.00 from holding Caihong Display Devices or generate 77.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Allgens Medical Technology
Performance |
| Timeline |
| Caihong Display Devices |
| Allgens Medical Tech |
Caihong Display and Allgens Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Allgens Medical
The main advantage of trading using opposite Caihong Display and Allgens Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Allgens Medical 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 Allgens Medical will offset losses from the drop in Allgens Medical's long position.| Caihong Display vs. Hubei Geoway Investment | Caihong Display vs. Zhongrun Resources Investment | Caihong Display vs. Jiangsu Yueda Investment | Caihong Display vs. Shantui Construction Machinery |
| Allgens Medical vs. Bingo Software Co | Allgens Medical vs. Jiangxi Hengda Hi Tech | Allgens Medical vs. Linewell Software Co | Allgens Medical vs. Caihong Display Devices |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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