Correlation Between Cansino Biologics and Guangzhou KDT
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By analyzing existing cross correlation between Cansino Biologics and Guangzhou KDT Machinery, you can compare the effects of market volatilities on Cansino Biologics and Guangzhou KDT 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 Cansino Biologics with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cansino Biologics and Guangzhou KDT.
Diversification Opportunities for Cansino Biologics and Guangzhou KDT
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cansino and Guangzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cansino Biologics and Guangzhou KDT Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KDT Machinery and Cansino Biologics 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 Cansino Biologics are associated (or correlated) with Guangzhou KDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KDT Machinery has no effect on the direction of Cansino Biologics i.e., Cansino Biologics and Guangzhou KDT go up and down completely randomly.
Pair Corralation between Cansino Biologics and Guangzhou KDT
Assuming the 90 days trading horizon Cansino Biologics is expected to under-perform the Guangzhou KDT. In addition to that, Cansino Biologics is 1.44 times more volatile than Guangzhou KDT Machinery. It trades about -0.07 of its total potential returns per unit of risk. Guangzhou KDT Machinery is currently generating about 0.34 per unit of volatility. If you would invest 1,605 in Guangzhou KDT Machinery on November 7, 2024 and sell it today you would earn a total of 127.00 from holding Guangzhou KDT Machinery or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cansino Biologics vs. Guangzhou KDT Machinery
Performance |
| Timeline |
| Cansino Biologics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangzhou KDT Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cansino Biologics and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cansino Biologics and Guangzhou KDT
The main advantage of trading using opposite Cansino Biologics and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cansino Biologics position performs unexpectedly, Guangzhou KDT 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 Guangzhou KDT will offset losses from the drop in Guangzhou KDT's long position.The idea behind Cansino Biologics and Guangzhou KDT Machinery 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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