Correlation Between Changchun BCHT and Kuangda Technology
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and Kuangda Technology Group, you can compare the effects of market volatilities on Changchun BCHT and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Kuangda Technology.
Diversification Opportunities for Changchun BCHT and Kuangda Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Kuangda is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Kuangda Technology go up and down completely randomly.
Pair Corralation between Changchun BCHT and Kuangda Technology
Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to under-perform the Kuangda Technology. But the stock apears to be less risky and, when comparing its historical volatility, Changchun BCHT Biotechnology is 1.26 times less risky than Kuangda Technology. The stock trades about -0.38 of its potential returns per unit of risk. The Kuangda Technology Group is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Kuangda Technology Group on October 28, 2024 and sell it today you would lose (33.00) from holding Kuangda Technology Group or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. Kuangda Technology Group
Performance |
| Timeline |
| Changchun BCHT Biote |
| Kuangda Technology |
Changchun BCHT and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and Kuangda Technology
The main advantage of trading using opposite Changchun BCHT and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Changchun BCHT vs. Everdisplay Optronics Shanghai | Changchun BCHT vs. Caihong Display Devices | Changchun BCHT vs. Eit Environmental Development | Changchun BCHT vs. Sinocat Environmental Technology |
| Kuangda Technology vs. Wuxi Xuelang Environmental | Kuangda Technology vs. Tongxing Environmental Protection | Kuangda Technology vs. Tibet Huayu Mining | Kuangda Technology vs. Western Mining Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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