Correlation Between Liaoning Chengda and Beijing UniStrong
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Beijing UniStrong Science, you can compare the effects of market volatilities on Liaoning Chengda and Beijing UniStrong 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 Liaoning Chengda with a short position of Beijing UniStrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Beijing UniStrong.
Diversification Opportunities for Liaoning Chengda and Beijing UniStrong
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Beijing is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Beijing UniStrong Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing UniStrong Science and Liaoning Chengda 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 Liaoning Chengda Biotechnology are associated (or correlated) with Beijing UniStrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing UniStrong Science has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Beijing UniStrong go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Beijing UniStrong
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Beijing UniStrong. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 2.83 times less risky than Beijing UniStrong. The stock trades about -0.04 of its potential returns per unit of risk. The Beijing UniStrong Science is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 923.00 in Beijing UniStrong Science on September 15, 2024 and sell it today you would earn a total of 211.00 from holding Beijing UniStrong Science or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Beijing UniStrong Science
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Beijing UniStrong Science |
Liaoning Chengda and Beijing UniStrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Beijing UniStrong
The main advantage of trading using opposite Liaoning Chengda and Beijing UniStrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Beijing UniStrong 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 Beijing UniStrong will offset losses from the drop in Beijing UniStrong's long position.| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China | Liaoning Chengda vs. Agricultural Bank of |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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