Correlation Between Changjiang Publishing and Chengdu Kanghua
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By analyzing existing cross correlation between Changjiang Publishing Media and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Changjiang Publishing and Chengdu Kanghua 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 Changjiang Publishing with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and Chengdu Kanghua.
Diversification Opportunities for Changjiang Publishing and Chengdu Kanghua
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Changjiang and Chengdu is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Changjiang Publishing 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 Changjiang Publishing Media are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Changjiang Publishing and Chengdu Kanghua
Assuming the 90 days trading horizon Changjiang Publishing Media is expected to generate 0.66 times more return on investment than Chengdu Kanghua. However, Changjiang Publishing Media is 1.51 times less risky than Chengdu Kanghua. It trades about 0.04 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.01 per unit of risk. If you would invest 752.00 in Changjiang Publishing Media on August 25, 2024 and sell it today you would earn a total of 111.00 from holding Changjiang Publishing Media or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Publishing Media vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Changjiang Publishing |
| Chengdu Kanghua Biol |
Changjiang Publishing and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Publishing and Chengdu Kanghua
The main advantage of trading using opposite Changjiang Publishing and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Publishing position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Changjiang Publishing vs. China State Construction | Changjiang Publishing vs. Huafa Industrial Co | Changjiang Publishing vs. China International Capital | Changjiang Publishing vs. Kweichow Moutai Co |
| Chengdu Kanghua vs. Changjiang Publishing Media | Chengdu Kanghua vs. Northern United Publishing | Chengdu Kanghua vs. Time Publishing and | Chengdu Kanghua vs. Shandong Publishing Media |
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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