Correlation Between Threes Company and Chengdu Kanghua
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By analyzing existing cross correlation between Threes Company Media and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Threes Company 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 Threes Company with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Threes Company and Chengdu Kanghua.
Diversification Opportunities for Threes Company and Chengdu Kanghua
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Threes and Chengdu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Threes Company Media 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 Threes Company 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 Threes Company Media 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 Threes Company i.e., Threes Company and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Threes Company and Chengdu Kanghua
Assuming the 90 days trading horizon Threes Company Media is expected to under-perform the Chengdu Kanghua. In addition to that, Threes Company is 1.28 times more volatile than Chengdu Kanghua Biological. It trades about -0.06 of its total potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.03 per unit of volatility. If you would invest 8,988 in Chengdu Kanghua Biological on August 24, 2024 and sell it today you would lose (3,497) from holding Chengdu Kanghua Biological or give up 38.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Threes Company Media vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Threes Company |
| Chengdu Kanghua Biol |
Threes Company and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Threes Company and Chengdu Kanghua
The main advantage of trading using opposite Threes Company and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Threes Company 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.| Threes Company vs. Industrial and Commercial | Threes Company vs. Agricultural Bank of | Threes Company vs. China Construction Bank | Threes Company vs. Bank of China |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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