Correlation Between Liaoning Chengda and Shanghai Rongtai
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Shanghai Rongtai Health, you can compare the effects of market volatilities on Liaoning Chengda and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Shanghai Rongtai.
Diversification Opportunities for Liaoning Chengda and Shanghai Rongtai
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liaoning and Shanghai is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Shanghai Rongtai
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.73 times more return on investment than Shanghai Rongtai. However, Liaoning Chengda Biotechnology is 1.36 times less risky than Shanghai Rongtai. It trades about 0.02 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.07 per unit of risk. If you would invest 2,578 in Liaoning Chengda Biotechnology on November 1, 2024 and sell it today you would earn a total of 12.00 from holding Liaoning Chengda Biotechnology or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Shanghai Rongtai Health |
Liaoning Chengda and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Shanghai Rongtai
The main advantage of trading using opposite Liaoning Chengda and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Liaoning Chengda vs. China Petroleum Chemical | Liaoning Chengda vs. PetroChina Co Ltd | Liaoning Chengda vs. China State Construction | Liaoning Chengda vs. China Railway Group |
| Shanghai Rongtai vs. Liaoning Chengda Biotechnology | Shanghai Rongtai vs. Bloomage Biotechnology Corp | Shanghai Rongtai vs. Anhui Tongguan Copper | Shanghai Rongtai vs. Shenyang Huitian Thermal |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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