Correlation Between Liaoning Chengda and China State
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and China State Construction, you can compare the effects of market volatilities on Liaoning Chengda and China State 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 China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and China State.
Diversification Opportunities for Liaoning Chengda and China State
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liaoning and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction 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 China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and China State go up and down completely randomly.
Pair Corralation between Liaoning Chengda and China State
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the China State. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 1.11 times less risky than China State. The stock trades about -0.02 of its potential returns per unit of risk. The China State Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 527.00 in China State Construction on October 29, 2024 and sell it today you would earn a total of 32.00 from holding China State Construction or generate 6.07% 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. China State Construction
Performance |
| Timeline |
| Liaoning Chengda Bio |
| China State Construction |
Liaoning Chengda and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and China State
The main advantage of trading using opposite Liaoning Chengda and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.| Liaoning Chengda vs. Shandong Rike Chemical | Liaoning Chengda vs. Lianhe Chemical Technology | Liaoning Chengda vs. Qingdao Foods Co | Liaoning Chengda vs. Dymatic Chemicals |
| China State vs. Panda Dairy Corp | China State vs. Uroica Mining Safety | China State vs. Qingdao Foods Co | China State vs. Kingclean Electric Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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