Correlation Between Cathay Biotech and CNPC Capital
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By analyzing existing cross correlation between Cathay Biotech and CNPC Capital Co, you can compare the effects of market volatilities on Cathay Biotech and CNPC Capital 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 Cathay Biotech with a short position of CNPC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Biotech and CNPC Capital.
Diversification Opportunities for Cathay Biotech and CNPC Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cathay and CNPC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Biotech and CNPC Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNPC Capital and Cathay Biotech 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 Cathay Biotech are associated (or correlated) with CNPC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNPC Capital has no effect on the direction of Cathay Biotech i.e., Cathay Biotech and CNPC Capital go up and down completely randomly.
Pair Corralation between Cathay Biotech and CNPC Capital
Assuming the 90 days trading horizon Cathay Biotech is expected to under-perform the CNPC Capital. But the stock apears to be less risky and, when comparing its historical volatility, Cathay Biotech is 1.1 times less risky than CNPC Capital. The stock trades about -0.37 of its potential returns per unit of risk. The CNPC Capital Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 728.00 in CNPC Capital Co on September 27, 2024 and sell it today you would lose (14.00) from holding CNPC Capital Co or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Biotech vs. CNPC Capital Co
Performance |
| Timeline |
| Cathay Biotech |
| CNPC Capital |
Cathay Biotech and CNPC Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Biotech and CNPC Capital
The main advantage of trading using opposite Cathay Biotech and CNPC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Biotech position performs unexpectedly, CNPC Capital 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 CNPC Capital will offset losses from the drop in CNPC Capital's long position.| Cathay Biotech vs. Zijin Mining Group | Cathay Biotech vs. Wanhua Chemical Group | Cathay Biotech vs. Baoshan Iron Steel | Cathay Biotech vs. Shandong Gold Mining |
| CNPC Capital vs. Ming Yang Smart | CNPC Capital vs. 159681 | CNPC Capital vs. 159005 | CNPC Capital vs. Loctek Ergonomic Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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