Correlation Between China Railway and Betta Pharmaceuticals
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By analyzing existing cross correlation between China Railway Group and Betta Pharmaceuticals Co, you can compare the effects of market volatilities on China Railway and Betta Pharmaceuticals 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 China Railway with a short position of Betta Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Betta Pharmaceuticals.
Diversification Opportunities for China Railway and Betta Pharmaceuticals
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Betta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Betta Pharmaceuticals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betta Pharmaceuticals and China Railway 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 China Railway Group are associated (or correlated) with Betta Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betta Pharmaceuticals has no effect on the direction of China Railway i.e., China Railway and Betta Pharmaceuticals go up and down completely randomly.
Pair Corralation between China Railway and Betta Pharmaceuticals
Assuming the 90 days trading horizon China Railway is expected to generate 39.93 times less return on investment than Betta Pharmaceuticals. But when comparing it to its historical volatility, China Railway Group is 1.73 times less risky than Betta Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Betta Pharmaceuticals Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,606 in Betta Pharmaceuticals Co on September 1, 2024 and sell it today you would earn a total of 929.00 from holding Betta Pharmaceuticals Co or generate 20.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Railway Group vs. Betta Pharmaceuticals Co
Performance |
| Timeline |
| China Railway Group |
| Betta Pharmaceuticals |
China Railway and Betta Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Betta Pharmaceuticals
The main advantage of trading using opposite China Railway and Betta Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Betta Pharmaceuticals 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 Betta Pharmaceuticals will offset losses from the drop in Betta Pharmaceuticals' long position.| China Railway vs. Shanghai Jinfeng Wine | China Railway vs. Changchun Engley Automobile | China Railway vs. Haima Automobile Group | China Railway vs. Xinjiang Communications Construction |
| Betta Pharmaceuticals vs. China Petroleum Chemical | Betta Pharmaceuticals vs. PetroChina Co Ltd | Betta Pharmaceuticals vs. China State Construction | Betta Pharmaceuticals vs. China Railway Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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