Correlation Between Liaoning Chengda and Yoantion Industrial
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Yoantion Industrial IncLtd, you can compare the effects of market volatilities on Liaoning Chengda and Yoantion Industrial 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 Yoantion Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Yoantion Industrial.
Diversification Opportunities for Liaoning Chengda and Yoantion Industrial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liaoning and Yoantion is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Yoantion Industrial IncLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoantion Industrial 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 Yoantion Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoantion Industrial has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Yoantion Industrial go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Yoantion Industrial
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Yoantion Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 2.06 times less risky than Yoantion Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The Yoantion Industrial IncLtd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,559 in Yoantion Industrial IncLtd on September 3, 2024 and sell it today you would lose (306.00) from holding Yoantion Industrial IncLtd or give up 11.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Yoantion Industrial IncLtd
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Yoantion Industrial |
Liaoning Chengda and Yoantion Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Yoantion Industrial
The main advantage of trading using opposite Liaoning Chengda and Yoantion Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Yoantion Industrial 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 Yoantion Industrial will offset losses from the drop in Yoantion Industrial's long position.| Liaoning Chengda vs. Chengdu Kanghua Biological | Liaoning Chengda vs. Beijing Wantai Biological | Liaoning Chengda vs. Suzhou Novoprotein Scientific | Liaoning Chengda vs. Aluminum Corp of |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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