Correlation Between Changchun BCHT and Xiwang Foodstuffs
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on Changchun BCHT and Xiwang Foodstuffs 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 Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Xiwang Foodstuffs.
Diversification Opportunities for Changchun BCHT and Xiwang Foodstuffs
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Changchun and Xiwang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs 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 Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between Changchun BCHT and Xiwang Foodstuffs
Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to under-perform the Xiwang Foodstuffs. But the stock apears to be less risky and, when comparing its historical volatility, Changchun BCHT Biotechnology is 1.33 times less risky than Xiwang Foodstuffs. The stock trades about -0.28 of its potential returns per unit of risk. The Xiwang Foodstuffs Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 384.00 in Xiwang Foodstuffs Co on October 23, 2024 and sell it today you would lose (32.00) from holding Xiwang Foodstuffs Co or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| Changchun BCHT Biote |
| Xiwang Foodstuffs |
Changchun BCHT and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and Xiwang Foodstuffs
The main advantage of trading using opposite Changchun BCHT and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.| Changchun BCHT vs. Hubei Xingfa Chemicals | Changchun BCHT vs. Ningxia Younglight Chemicals | Changchun BCHT vs. Porton Fine Chemicals | Changchun BCHT vs. Angang Steel Co |
| Xiwang Foodstuffs vs. Allwin Telecommunication Co | Xiwang Foodstuffs vs. Muyuan Foodstuff Co | Xiwang Foodstuffs vs. Beijing Bewinner Communications | Xiwang Foodstuffs vs. TianJin 712 Communication |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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