Correlation Between Cabio Biotech and Caihong Display
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Caihong Display Devices, you can compare the effects of market volatilities on Cabio Biotech and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Caihong Display.
Diversification Opportunities for Cabio Biotech and Caihong Display
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cabio and Caihong is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Cabio Biotech i.e., Cabio Biotech and Caihong Display go up and down completely randomly.
Pair Corralation between Cabio Biotech and Caihong Display
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to generate 0.72 times more return on investment than Caihong Display. However, Cabio Biotech Wuhan is 1.38 times less risky than Caihong Display. It trades about 0.15 of its potential returns per unit of risk. Caihong Display Devices is currently generating about 0.1 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. Caihong Display Devices
Performance |
| Timeline |
| Cabio Biotech Wuhan |
| Caihong Display Devices |
Cabio Biotech and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Caihong Display
The main advantage of trading using opposite Cabio Biotech and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display'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 |
| Caihong Display vs. Industrial and Commercial | Caihong Display vs. Kweichow Moutai Co | Caihong Display vs. Agricultural Bank of | Caihong Display vs. China Mobile Limited |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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