Correlation Between Cabio Biotech and Zhangjiagang Elegant
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Zhangjiagang Elegant Home, you can compare the effects of market volatilities on Cabio Biotech and Zhangjiagang Elegant 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 Zhangjiagang Elegant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Zhangjiagang Elegant.
Diversification Opportunities for Cabio Biotech and Zhangjiagang Elegant
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cabio and Zhangjiagang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan and Zhangjiagang Elegant Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangjiagang Elegant Home 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 Zhangjiagang Elegant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangjiagang Elegant Home has no effect on the direction of Cabio Biotech i.e., Cabio Biotech and Zhangjiagang Elegant go up and down completely randomly.
Pair Corralation between Cabio Biotech and Zhangjiagang Elegant
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to generate 0.99 times more return on investment than Zhangjiagang Elegant. However, Cabio Biotech Wuhan is 1.01 times less risky than Zhangjiagang Elegant. It trades about 0.15 of its potential returns per unit of risk. Zhangjiagang Elegant Home is currently generating about 0.12 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. Zhangjiagang Elegant Home
Performance |
| Timeline |
| Cabio Biotech Wuhan |
| Zhangjiagang Elegant Home |
Cabio Biotech and Zhangjiagang Elegant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Zhangjiagang Elegant
The main advantage of trading using opposite Cabio Biotech and Zhangjiagang Elegant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech position performs unexpectedly, Zhangjiagang Elegant 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 Zhangjiagang Elegant will offset losses from the drop in Zhangjiagang Elegant'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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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