Correlation Between Liaoning Chengda and Great Sun
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Great Sun Foods Co, you can compare the effects of market volatilities on Liaoning Chengda and Great Sun 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 Great Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Great Sun.
Diversification Opportunities for Liaoning Chengda and Great Sun
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liaoning and Great is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Great Sun Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Sun Foods 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 Great Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Sun Foods has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Great Sun go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Great Sun
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Great Sun. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 4.28 times less risky than Great Sun. The stock trades about -0.63 of its potential returns per unit of risk. The Great Sun Foods Co is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 525.00 in Great Sun Foods Co on October 12, 2024 and sell it today you would lose (70.00) from holding Great Sun Foods Co or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Great Sun Foods Co
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Great Sun Foods |
Liaoning Chengda and Great Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Great Sun
The main advantage of trading using opposite Liaoning Chengda and Great Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Great Sun 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 Great Sun will offset losses from the drop in Great Sun's long position.| Liaoning Chengda vs. Sichuan Hebang Biotechnology | Liaoning Chengda vs. Anhui Huilong Agricultural | Liaoning Chengda vs. Miracll Chemicals Co | Liaoning Chengda vs. Guangzhou KDT Machinery |
| Great Sun vs. Liaoning Chengda Biotechnology | Great Sun vs. Qijing Machinery | Great Sun vs. Sichuan Hebang Biotechnology | Great Sun vs. Long Yuan Construction |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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