Correlation Between Cathay Biotech and Shanghai Broadband
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By analyzing existing cross correlation between Cathay Biotech and Shanghai Broadband Technology, you can compare the effects of market volatilities on Cathay Biotech and Shanghai Broadband 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 Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Biotech and Shanghai Broadband.
Diversification Opportunities for Cathay Biotech and Shanghai Broadband
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cathay and Shanghai is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Biotech and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband 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 Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Cathay Biotech i.e., Cathay Biotech and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Cathay Biotech and Shanghai Broadband
Assuming the 90 days trading horizon Cathay Biotech is expected to generate 0.52 times more return on investment than Shanghai Broadband. However, Cathay Biotech is 1.93 times less risky than Shanghai Broadband. It trades about -0.22 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about -0.14 per unit of risk. If you would invest 4,250 in Cathay Biotech on October 20, 2024 and sell it today you would lose (320.00) from holding Cathay Biotech or give up 7.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Biotech vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Cathay Biotech |
| Shanghai Broadband |
Cathay Biotech and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Biotech and Shanghai Broadband
The main advantage of trading using opposite Cathay Biotech and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Biotech position performs unexpectedly, Shanghai Broadband 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 Shanghai Broadband will offset losses from the drop in Shanghai Broadband'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 |
| Shanghai Broadband vs. Jiujiang Shanshui Technology | Shanghai Broadband vs. Digiwin Software Co | Shanghai Broadband vs. Kuangda Technology Group | Shanghai Broadband vs. Sharetronic Data 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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