Correlation Between Zhangjiagang Freetrade and Changchun BCHT
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By analyzing existing cross correlation between Zhangjiagang Freetrade Science and Changchun BCHT Biotechnology, you can compare the effects of market volatilities on Zhangjiagang Freetrade and Changchun BCHT 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 Zhangjiagang Freetrade with a short position of Changchun BCHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhangjiagang Freetrade and Changchun BCHT.
Diversification Opportunities for Zhangjiagang Freetrade and Changchun BCHT
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhangjiagang and Changchun is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zhangjiagang Freetrade Science and Changchun BCHT Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun BCHT Biote and Zhangjiagang Freetrade 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 Zhangjiagang Freetrade Science are associated (or correlated) with Changchun BCHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun BCHT Biote has no effect on the direction of Zhangjiagang Freetrade i.e., Zhangjiagang Freetrade and Changchun BCHT go up and down completely randomly.
Pair Corralation between Zhangjiagang Freetrade and Changchun BCHT
Assuming the 90 days trading horizon Zhangjiagang Freetrade Science is expected to generate 0.73 times more return on investment than Changchun BCHT. However, Zhangjiagang Freetrade Science is 1.36 times less risky than Changchun BCHT. It trades about 0.01 of its potential returns per unit of risk. Changchun BCHT Biotechnology is currently generating about -0.06 per unit of risk. If you would invest 399.00 in Zhangjiagang Freetrade Science on September 3, 2024 and sell it today you would lose (16.00) from holding Zhangjiagang Freetrade Science or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhangjiagang Freetrade Science vs. Changchun BCHT Biotechnology
Performance |
| Timeline |
| Zhangjiagang Freetrade |
| Changchun BCHT Biote |
Zhangjiagang Freetrade and Changchun BCHT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhangjiagang Freetrade and Changchun BCHT
The main advantage of trading using opposite Zhangjiagang Freetrade and Changchun BCHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhangjiagang Freetrade position performs unexpectedly, Changchun BCHT 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 Changchun BCHT will offset losses from the drop in Changchun BCHT's long position.The idea behind Zhangjiagang Freetrade Science and Changchun BCHT Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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