Correlation Between Cambricon Technologies and Jinyu Bio
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By analyzing existing cross correlation between Cambricon Technologies Corp and Jinyu Bio Technology Co, you can compare the effects of market volatilities on Cambricon Technologies and Jinyu Bio 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 Cambricon Technologies with a short position of Jinyu Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambricon Technologies and Jinyu Bio.
Diversification Opportunities for Cambricon Technologies and Jinyu Bio
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cambricon and Jinyu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cambricon Technologies Corp and Jinyu Bio Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinyu Bio Technology and Cambricon Technologies 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 Cambricon Technologies Corp are associated (or correlated) with Jinyu Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinyu Bio Technology has no effect on the direction of Cambricon Technologies i.e., Cambricon Technologies and Jinyu Bio go up and down completely randomly.
Pair Corralation between Cambricon Technologies and Jinyu Bio
Assuming the 90 days trading horizon Cambricon Technologies Corp is expected to generate 2.42 times more return on investment than Jinyu Bio. However, Cambricon Technologies is 2.42 times more volatile than Jinyu Bio Technology Co. It trades about 0.11 of its potential returns per unit of risk. Jinyu Bio Technology Co is currently generating about -0.02 per unit of risk. If you would invest 6,687 in Cambricon Technologies Corp on September 3, 2024 and sell it today you would earn a total of 49,513 from holding Cambricon Technologies Corp or generate 740.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambricon Technologies Corp vs. Jinyu Bio Technology Co
Performance |
| Timeline |
| Cambricon Technologies |
| Jinyu Bio Technology |
Cambricon Technologies and Jinyu Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambricon Technologies and Jinyu Bio
The main advantage of trading using opposite Cambricon Technologies and Jinyu Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambricon Technologies position performs unexpectedly, Jinyu Bio 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 Jinyu Bio will offset losses from the drop in Jinyu Bio's long position.The idea behind Cambricon Technologies Corp and Jinyu Bio Technology Co 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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