Correlation Between Zhende Medical and Chengdu Kanghua
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By analyzing existing cross correlation between Zhende Medical Co and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Zhende Medical and Chengdu Kanghua 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 Zhende Medical with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhende Medical and Chengdu Kanghua.
Diversification Opportunities for Zhende Medical and Chengdu Kanghua
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhende and Chengdu is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zhende Medical Co and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Zhende Medical 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 Zhende Medical Co are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Zhende Medical i.e., Zhende Medical and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Zhende Medical and Chengdu Kanghua
Assuming the 90 days trading horizon Zhende Medical is expected to generate 1.32 times less return on investment than Chengdu Kanghua. But when comparing it to its historical volatility, Zhende Medical Co is 2.02 times less risky than Chengdu Kanghua. It trades about 0.1 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,122 in Chengdu Kanghua Biological on September 3, 2024 and sell it today you would earn a total of 641.00 from holding Chengdu Kanghua Biological or generate 12.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhende Medical Co vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Zhende Medical |
| Chengdu Kanghua Biol |
Zhende Medical and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhende Medical and Chengdu Kanghua
The main advantage of trading using opposite Zhende Medical and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhende Medical position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Zhende Medical vs. Chengdu Kanghua Biological | Zhende Medical vs. Beijing Wantai Biological | Zhende Medical vs. Suzhou Novoprotein Scientific | Zhende Medical vs. Aluminum Corp of |
| Chengdu Kanghua vs. Chengdu Xinzhu RoadBridge | Chengdu Kanghua vs. China Life Insurance | Chengdu Kanghua vs. Shaanxi Broadcast TV | Chengdu Kanghua vs. Tianshan Aluminum 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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