Correlation Between Changchun BCHT and Fujian Wanchen
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Changchun BCHT and Fujian Wanchen 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 Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Fujian Wanchen.
Diversification Opportunities for Changchun BCHT and Fujian Wanchen
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Changchun and Fujian is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote 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 Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Changchun BCHT and Fujian Wanchen
Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to under-perform the Fujian Wanchen. But the stock apears to be less risky and, when comparing its historical volatility, Changchun BCHT Biotechnology is 1.56 times less risky than Fujian Wanchen. The stock trades about -0.43 of its potential returns per unit of risk. The Fujian Wanchen Biotechnology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 8,180 in Fujian Wanchen Biotechnology on October 12, 2024 and sell it today you would lose (352.00) from holding Fujian Wanchen Biotechnology or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Changchun BCHT Biote |
| Fujian Wanchen Biote |
Changchun BCHT and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and Fujian Wanchen
The main advantage of trading using opposite Changchun BCHT and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Changchun BCHT vs. Jiangsu Yueda Investment | Changchun BCHT vs. Beijing Mainstreets Investment | Changchun BCHT vs. Yunnan Jianzhijia Health Chain | Changchun BCHT vs. Humanwell Healthcare Group |
| Fujian Wanchen vs. Xiwang Foodstuffs Co | Fujian Wanchen vs. HaiXin Foods Co | Fujian Wanchen vs. Eastroc Beverage Group | Fujian Wanchen vs. Gan Yuan Foods |
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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