Correlation Between Sichuan Hebang and Cultural Investment
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Cultural Investment Holdings, you can compare the effects of market volatilities on Sichuan Hebang and Cultural Investment 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 Sichuan Hebang with a short position of Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Cultural Investment.
Diversification Opportunities for Sichuan Hebang and Cultural Investment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Cultural is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Cultural Investment go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Cultural Investment
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Cultural Investment. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Hebang Biotechnology is 2.21 times less risky than Cultural Investment. The stock trades about -0.05 of its potential returns per unit of risk. The Cultural Investment Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 227.00 in Cultural Investment Holdings on October 16, 2024 and sell it today you would lose (18.00) from holding Cultural Investment Holdings or give up 7.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Cultural Investment Holdings
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Cultural Investment |
Sichuan Hebang and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Cultural Investment
The main advantage of trading using opposite Sichuan Hebang and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Sichuan Hebang vs. Allwin Telecommunication Co | Sichuan Hebang vs. State Grid InformationCommunication | Sichuan Hebang vs. Shenyang Chemical Industry | Sichuan Hebang vs. Guizhou Chanhen Chemical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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