Correlation Between Cabio Biotech and Yuan Longping
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Yuan Longping High tech, you can compare the effects of market volatilities on Cabio Biotech and Yuan Longping 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 Cabio Biotech with a short position of Yuan Longping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Yuan Longping.
Diversification Opportunities for Cabio Biotech and Yuan Longping
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cabio and Yuan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan and Yuan Longping High tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan Longping High and Cabio 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 Cabio Biotech Wuhan are associated (or correlated) with Yuan Longping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan Longping High has no effect on the direction of Cabio Biotech i.e., Cabio Biotech and Yuan Longping go up and down completely randomly.
Pair Corralation between Cabio Biotech and Yuan Longping
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to generate 1.58 times more return on investment than Yuan Longping. However, Cabio Biotech is 1.58 times more volatile than Yuan Longping High tech. It trades about 0.15 of its potential returns per unit of risk. Yuan Longping High tech is currently generating about -0.2 per unit of risk. If you would invest 1,878 in Cabio Biotech Wuhan on November 3, 2024 and sell it today you would earn a total of 127.00 from holding Cabio Biotech Wuhan or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. Yuan Longping High tech
Performance |
| Timeline |
| Cabio Biotech Wuhan |
| Yuan Longping High |
Cabio Biotech and Yuan Longping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Yuan Longping
The main advantage of trading using opposite Cabio Biotech and Yuan Longping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech position performs unexpectedly, Yuan Longping 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 Yuan Longping will offset losses from the drop in Yuan Longping's long position.| Cabio Biotech vs. PetroChina Co Ltd | Cabio Biotech vs. China Railway Construction | Cabio Biotech vs. China Mobile Limited | Cabio Biotech vs. Industrial and Commercial |
| Yuan Longping vs. Bus Online Co | Yuan Longping vs. Holitech Technology Co | Yuan Longping vs. Gome Telecom Equipment | Yuan Longping vs. Cultural Investment Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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