Correlation Between Liaoning Chengda and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Liaoning Chengda and Beijing HuaYuanYiTong 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 HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Beijing HuaYuanYiTong.
Diversification Opportunities for Liaoning Chengda and Beijing HuaYuanYiTong
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liaoning and Beijing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong 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 HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Beijing HuaYuanYiTong. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 1.63 times less risky than Beijing HuaYuanYiTong. The stock trades about -0.02 of its potential returns per unit of risk. The Beijing HuaYuanYiTong Thermal is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 890.00 in Beijing HuaYuanYiTong Thermal on October 22, 2024 and sell it today you would earn a total of 102.00 from holding Beijing HuaYuanYiTong Thermal or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Beijing HuaYuanYiTong |
Liaoning Chengda and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Beijing HuaYuanYiTong
The main advantage of trading using opposite Liaoning Chengda and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Beijing HuaYuanYiTong 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 HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Liaoning Chengda vs. Maccura Biotechnology Co | Liaoning Chengda vs. Bus Online Co | Liaoning Chengda vs. CITIC Metal Co | Liaoning Chengda vs. Aba Chemicals Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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