Correlation Between Yunnan Jianzhijia and Qingdao Choho
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By analyzing existing cross correlation between Yunnan Jianzhijia Health Chain and Qingdao Choho Industrial, you can compare the effects of market volatilities on Yunnan Jianzhijia and Qingdao Choho 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 Yunnan Jianzhijia with a short position of Qingdao Choho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Jianzhijia and Qingdao Choho.
Diversification Opportunities for Yunnan Jianzhijia and Qingdao Choho
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yunnan and Qingdao is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Jianzhijia Health Chain and Qingdao Choho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Choho Industrial and Yunnan Jianzhijia 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 Yunnan Jianzhijia Health Chain are associated (or correlated) with Qingdao Choho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Choho Industrial has no effect on the direction of Yunnan Jianzhijia i.e., Yunnan Jianzhijia and Qingdao Choho go up and down completely randomly.
Pair Corralation between Yunnan Jianzhijia and Qingdao Choho
Assuming the 90 days trading horizon Yunnan Jianzhijia Health Chain is expected to under-perform the Qingdao Choho. In addition to that, Yunnan Jianzhijia is 1.23 times more volatile than Qingdao Choho Industrial. It trades about -0.51 of its total potential returns per unit of risk. Qingdao Choho Industrial is currently generating about -0.16 per unit of volatility. If you would invest 2,912 in Qingdao Choho Industrial on October 17, 2024 and sell it today you would lose (221.00) from holding Qingdao Choho Industrial or give up 7.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Jianzhijia Health Chain vs. Qingdao Choho Industrial
Performance |
| Timeline |
| Yunnan Jianzhijia |
| Qingdao Choho Industrial |
Yunnan Jianzhijia and Qingdao Choho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Jianzhijia and Qingdao Choho
The main advantage of trading using opposite Yunnan Jianzhijia and Qingdao Choho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Jianzhijia position performs unexpectedly, Qingdao Choho 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 Qingdao Choho will offset losses from the drop in Qingdao Choho's long position.The idea behind Yunnan Jianzhijia Health Chain and Qingdao Choho Industrial 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.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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