Correlation Between Cabio Biotech and Jinling Hotel
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Jinling Hotel Corp, you can compare the effects of market volatilities on Cabio Biotech and Jinling Hotel 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 Jinling Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Jinling Hotel.
Diversification Opportunities for Cabio Biotech and Jinling Hotel
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cabio and Jinling is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan and Jinling Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinling Hotel Corp 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 Jinling Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinling Hotel Corp has no effect on the direction of Cabio Biotech i.e., Cabio Biotech and Jinling Hotel go up and down completely randomly.
Pair Corralation between Cabio Biotech and Jinling Hotel
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to under-perform the Jinling Hotel. In addition to that, Cabio Biotech is 1.4 times more volatile than Jinling Hotel Corp. It trades about -0.02 of its total potential returns per unit of risk. Jinling Hotel Corp is currently generating about -0.03 per unit of volatility. If you would invest 1,041 in Jinling Hotel Corp on November 7, 2024 and sell it today you would lose (375.00) from holding Jinling Hotel Corp or give up 36.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. Jinling Hotel Corp
Performance |
| Timeline |
| Cabio Biotech Wuhan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jinling Hotel Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cabio Biotech and Jinling Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Jinling Hotel
The main advantage of trading using opposite Cabio Biotech and Jinling Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech position performs unexpectedly, Jinling Hotel 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 Jinling Hotel will offset losses from the drop in Jinling Hotel's long position.The idea behind Cabio Biotech Wuhan and Jinling Hotel Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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