Correlation Between Cabio Biotech and Guangxi Wuzhou
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Cabio Biotech and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Guangxi Wuzhou.
Diversification Opportunities for Cabio Biotech and Guangxi Wuzhou
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cabio and Guangxi is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Cabio Biotech i.e., Cabio Biotech and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Cabio Biotech and Guangxi Wuzhou
Assuming the 90 days trading horizon Cabio Biotech is expected to generate 14.84 times less return on investment than Guangxi Wuzhou. In addition to that, Cabio Biotech is 1.19 times more volatile than Guangxi Wuzhou Communications. It trades about 0.0 of its total potential returns per unit of risk. Guangxi Wuzhou Communications is currently generating about 0.06 per unit of volatility. If you would invest 393.00 in Guangxi Wuzhou Communications on November 7, 2024 and sell it today you would earn a total of 41.00 from holding Guangxi Wuzhou Communications or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. Guangxi Wuzhou Communications
Performance |
| Timeline |
| Cabio Biotech Wuhan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangxi Wuzhou Commu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Cabio Biotech and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Guangxi Wuzhou
The main advantage of trading using opposite Cabio Biotech and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.The idea behind Cabio Biotech Wuhan and Guangxi Wuzhou Communications 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.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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