Correlation Between Chahua Modern and Ningbo MedicalSystem
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By analyzing existing cross correlation between Chahua Modern Housewares and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Chahua Modern and Ningbo MedicalSystem 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 Chahua Modern with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Ningbo MedicalSystem.
Diversification Opportunities for Chahua Modern and Ningbo MedicalSystem
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chahua and Ningbo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Chahua Modern 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 Chahua Modern Housewares are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Chahua Modern i.e., Chahua Modern and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Chahua Modern and Ningbo MedicalSystem
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 2.2 times more return on investment than Ningbo MedicalSystem. However, Chahua Modern is 2.2 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about 0.09 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.16 per unit of risk. If you would invest 2,200 in Chahua Modern Housewares on September 28, 2024 and sell it today you would earn a total of 121.00 from holding Chahua Modern Housewares or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Chahua Modern Housewares |
| Ningbo MedicalSystem |
Chahua Modern and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and Ningbo MedicalSystem
The main advantage of trading using opposite Chahua Modern and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern position performs unexpectedly, Ningbo MedicalSystem 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 Ningbo MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| Chahua Modern vs. Xiamen Jihong Package | Chahua Modern vs. New Hope Dairy | Chahua Modern vs. Shantou Wanshun Package | Chahua Modern vs. Jiahe Foods Industry |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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