Correlation Between Liaoning Dingjide and Cansino Biologics
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Cansino Biologics, you can compare the effects of market volatilities on Liaoning Dingjide and Cansino Biologics 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 Liaoning Dingjide with a short position of Cansino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Cansino Biologics.
Diversification Opportunities for Liaoning Dingjide and Cansino Biologics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Liaoning and Cansino is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Cansino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cansino Biologics and Liaoning Dingjide 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 Liaoning Dingjide Petrochemical are associated (or correlated) with Cansino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cansino Biologics has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Cansino Biologics go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Cansino Biologics
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to under-perform the Cansino Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Dingjide Petrochemical is 1.27 times less risky than Cansino Biologics. The stock trades about -0.01 of its potential returns per unit of risk. The Cansino Biologics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,389 in Cansino Biologics on November 8, 2024 and sell it today you would earn a total of 640.00 from holding Cansino Biologics or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Cansino Biologics
Performance |
| Timeline |
| Liaoning Dingjide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Cansino Biologics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liaoning Dingjide and Cansino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Cansino Biologics
The main advantage of trading using opposite Liaoning Dingjide and Cansino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Cansino Biologics 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 Cansino Biologics will offset losses from the drop in Cansino Biologics' long position.The idea behind Liaoning Dingjide Petrochemical and Cansino Biologics 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.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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