Correlation Between Changchun BCHT and Dynagreen Environmental

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Changchun BCHT and Dynagreen Environmental at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Changchun BCHT and Dynagreen Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Changchun BCHT Biotechnology and Dynagreen Environmental Protection, you can compare the effects of market volatilities on Changchun BCHT and Dynagreen Environmental 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 Dynagreen Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Dynagreen Environmental.

Diversification Opportunities for Changchun BCHT and Dynagreen Environmental

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Changchun and Dynagreen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Dynagreen Environmental Protec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynagreen Environmental 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 Dynagreen Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynagreen Environmental has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Dynagreen Environmental go up and down completely randomly.

Pair Corralation between Changchun BCHT and Dynagreen Environmental

Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to under-perform the Dynagreen Environmental. In addition to that, Changchun BCHT is 1.39 times more volatile than Dynagreen Environmental Protection. It trades about -0.16 of its total potential returns per unit of risk. Dynagreen Environmental Protection is currently generating about 0.09 per unit of volatility. If you would invest  619.00  in Dynagreen Environmental Protection on November 9, 2024 and sell it today you would earn a total of  7.00  from holding Dynagreen Environmental Protection or generate 1.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Changchun BCHT Biotechnology  vs.  Dynagreen Environmental Protec

 Performance 
       Timeline  
Changchun BCHT Biote 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Changchun BCHT Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Dynagreen Environmental 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Dynagreen Environmental Protection has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Changchun BCHT and Dynagreen Environmental Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Changchun BCHT and Dynagreen Environmental

The main advantage of trading using opposite Changchun BCHT and Dynagreen Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Dynagreen Environmental 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 Dynagreen Environmental will offset losses from the drop in Dynagreen Environmental's long position.
The idea behind Changchun BCHT Biotechnology and Dynagreen Environmental Protection 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.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Share Portfolio
Track or share privately all of your investments from the convenience of any device
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Fundamental Analysis
View fundamental data based on most recent published financial statements