Correlation Between UE Furniture and Chengdu Kanghua
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By analyzing existing cross correlation between UE Furniture Co and Chengdu Kanghua Biological, you can compare the effects of market volatilities on UE Furniture 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 UE Furniture with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and Chengdu Kanghua.
Diversification Opportunities for UE Furniture and Chengdu Kanghua
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 603600 and Chengdu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding UE Furniture 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 UE Furniture 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 UE Furniture 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 UE Furniture i.e., UE Furniture and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between UE Furniture and Chengdu Kanghua
Assuming the 90 days trading horizon UE Furniture Co is expected to generate 0.77 times more return on investment than Chengdu Kanghua. However, UE Furniture Co is 1.3 times less risky than Chengdu Kanghua. It trades about -0.04 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.21 per unit of risk. If you would invest 1,149 in UE Furniture Co on August 25, 2024 and sell it today you would lose (28.00) from holding UE Furniture Co or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
UE Furniture Co vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| UE Furniture |
| Chengdu Kanghua Biol |
UE Furniture and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and Chengdu Kanghua
The main advantage of trading using opposite UE Furniture and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE Furniture 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.| UE Furniture vs. Jiangsu Yanghe Brewery | UE Furniture vs. Shandong Mining Machinery | UE Furniture vs. Eastern Air Logistics | UE Furniture vs. Chengtun Mining Group |
| Chengdu Kanghua vs. Changjiang Publishing Media | Chengdu Kanghua vs. Northern United Publishing | Chengdu Kanghua vs. Time Publishing and | Chengdu Kanghua vs. Shandong Publishing Media |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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