Correlation Between Liaoning Chengda and Chinese Universe
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Chinese Universe Publishing, you can compare the effects of market volatilities on Liaoning Chengda and Chinese Universe 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 Chinese Universe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Chinese Universe.
Diversification Opportunities for Liaoning Chengda and Chinese Universe
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Chinese is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Chinese Universe Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Universe Pub 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 Chinese Universe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Universe Pub has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Chinese Universe go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Chinese Universe
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.77 times more return on investment than Chinese Universe. However, Liaoning Chengda Biotechnology is 1.3 times less risky than Chinese Universe. It trades about 0.2 of its potential returns per unit of risk. Chinese Universe Publishing is currently generating about -0.24 per unit of risk. If you would invest 2,499 in Liaoning Chengda Biotechnology on November 7, 2024 and sell it today you would earn a total of 107.00 from holding Liaoning Chengda Biotechnology or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Chinese Universe Publishing
Performance |
| Timeline |
| Liaoning Chengda Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chinese Universe Pub |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liaoning Chengda and Chinese Universe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Chinese Universe
The main advantage of trading using opposite Liaoning Chengda and Chinese Universe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Chinese Universe 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 Chinese Universe will offset losses from the drop in Chinese Universe's long position.The idea behind Liaoning Chengda Biotechnology and Chinese Universe Publishing 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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