Correlation Between Liaoning Chengda and Sichuan Furong
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Sichuan Furong Technology, you can compare the effects of market volatilities on Liaoning Chengda and Sichuan Furong 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 Sichuan Furong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Sichuan Furong.
Diversification Opportunities for Liaoning Chengda and Sichuan Furong
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liaoning and Sichuan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Sichuan Furong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Furong Technology 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 Sichuan Furong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Furong Technology has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Sichuan Furong go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Sichuan Furong
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Sichuan Furong. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 28.66 times less risky than Sichuan Furong. The stock trades about -0.02 of its potential returns per unit of risk. The Sichuan Furong Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,202 in Sichuan Furong Technology on October 16, 2024 and sell it today you would lose (70.00) from holding Sichuan Furong Technology or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Sichuan Furong Technology
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Sichuan Furong Technology |
Liaoning Chengda and Sichuan Furong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Sichuan Furong
The main advantage of trading using opposite Liaoning Chengda and Sichuan Furong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Sichuan Furong 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 Sichuan Furong will offset losses from the drop in Sichuan Furong's long position.| Liaoning Chengda vs. Jiangnan Mould Plastic | Liaoning Chengda vs. Orinko Advanced Plastics | Liaoning Chengda vs. King Strong New Material | Liaoning Chengda vs. Jiangsu Jinling Sports |
| Sichuan Furong vs. Allgens Medical Technology | Sichuan Furong vs. Kontour Medical Technology | Sichuan Furong vs. Jinhe Biotechnology Co | Sichuan Furong vs. Liaoning Chengda Biotechnology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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