Correlation Between Industrial and Cathay Biotech
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By analyzing existing cross correlation between Industrial and Commercial and Cathay Biotech, you can compare the effects of market volatilities on Industrial and Cathay Biotech 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 Industrial with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Cathay Biotech.
Diversification Opportunities for Industrial and Cathay Biotech
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Industrial and Cathay is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and Industrial 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 Industrial and Commercial are associated (or correlated) with Cathay Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Biotech has no effect on the direction of Industrial i.e., Industrial and Cathay Biotech go up and down completely randomly.
Pair Corralation between Industrial and Cathay Biotech
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.5 times more return on investment than Cathay Biotech. However, Industrial and Commercial is 2.01 times less risky than Cathay Biotech. It trades about 0.09 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.03 per unit of risk. If you would invest 407.00 in Industrial and Commercial on October 7, 2024 and sell it today you would earn a total of 264.00 from holding Industrial and Commercial or generate 64.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Cathay Biotech
Performance |
| Timeline |
| Industrial and Commercial |
| Cathay Biotech |
Industrial and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Cathay Biotech
The main advantage of trading using opposite Industrial and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Cathay Biotech 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 Cathay Biotech will offset losses from the drop in Cathay Biotech's long position.| Industrial vs. Anhui Gujing Distillery | Industrial vs. Kangxin New Materials | Industrial vs. Citic Guoan Wine | Industrial vs. Jiangsu Broadcasting Cable |
| Cathay Biotech vs. Sinomach General Machinery | Cathay Biotech vs. Daoming OpticsChemical Co | Cathay Biotech vs. Shantui Construction Machinery | Cathay Biotech vs. Wuxi Chemical Equipment |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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