Correlation Between Changchun BCHT and China Reform
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and China Reform Health, you can compare the effects of market volatilities on Changchun BCHT and China Reform 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 Changchun BCHT with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and China Reform.
Diversification Opportunities for Changchun BCHT and China Reform
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Changchun BCHT 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 Changchun BCHT Biotechnology are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and China Reform go up and down completely randomly.
Pair Corralation between Changchun BCHT and China Reform
Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to generate 0.79 times more return on investment than China Reform. However, Changchun BCHT Biotechnology is 1.27 times less risky than China Reform. It trades about -0.3 of its potential returns per unit of risk. China Reform Health is currently generating about -0.35 per unit of risk. If you would invest 2,618 in Changchun BCHT Biotechnology on October 20, 2024 and sell it today you would lose (305.00) from holding Changchun BCHT Biotechnology or give up 11.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. China Reform Health
Performance |
| Timeline |
| Changchun BCHT Biote |
| China Reform Health |
Changchun BCHT and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and China Reform
The main advantage of trading using opposite Changchun BCHT and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, China Reform 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 China Reform will offset losses from the drop in China Reform's long position.| Changchun BCHT vs. CITIC Metal Co | Changchun BCHT vs. Omnijoi Media Corp | Changchun BCHT vs. Zhejiang Yongjin Metal | Changchun BCHT vs. Jiaozuo Wanfang Aluminum |
| China Reform vs. Changchun Engley Automobile | China Reform vs. Hengli Industrial Development | China Reform vs. Tongyu Communication | China Reform vs. Bosera CMSK Industrial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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