Correlation Between China International and Nanhua Bio
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By analyzing existing cross correlation between China International Capital and Nanhua Bio Medicine, you can compare the effects of market volatilities on China International and Nanhua Bio 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 International with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Nanhua Bio.
Diversification Opportunities for China International and Nanhua Bio
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Nanhua is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and China International 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 International Capital are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of China International i.e., China International and Nanhua Bio go up and down completely randomly.
Pair Corralation between China International and Nanhua Bio
Assuming the 90 days trading horizon China International is expected to generate 14.83 times less return on investment than Nanhua Bio. But when comparing it to its historical volatility, China International Capital is 1.45 times less risky than Nanhua Bio. It trades about 0.0 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,263 in Nanhua Bio Medicine on August 26, 2024 and sell it today you would lose (256.00) from holding Nanhua Bio Medicine or give up 20.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Nanhua Bio Medicine
Performance |
| Timeline |
| China International |
| Nanhua Bio Medicine |
China International and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Nanhua Bio
The main advantage of trading using opposite China International and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| China International vs. Masterwork Machinery | China International vs. Qumei Furniture Group | China International vs. Anhui Huilong Agricultural | China International vs. Long Yuan Construction |
| Nanhua Bio vs. GigaDevice SemiconductorBeiji | Nanhua Bio vs. Puyang Huicheng Electronic | Nanhua Bio vs. Semiconductor Manufacturing Electronics | Nanhua Bio vs. Shenzhen Clou Electronics |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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