Correlation Between Liaoning Chengda and Anhui Huaheng
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Anhui Huaheng Biotechnology, you can compare the effects of market volatilities on Liaoning Chengda and Anhui Huaheng 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 Anhui Huaheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Anhui Huaheng.
Diversification Opportunities for Liaoning Chengda and Anhui Huaheng
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Anhui is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Anhui Huaheng Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaheng Biotec 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 Anhui Huaheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaheng Biotec has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Anhui Huaheng go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Anhui Huaheng
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.48 times more return on investment than Anhui Huaheng. However, Liaoning Chengda Biotechnology is 2.08 times less risky than Anhui Huaheng. It trades about -0.08 of its potential returns per unit of risk. Anhui Huaheng Biotechnology is currently generating about -0.17 per unit of risk. If you would invest 2,696 in Liaoning Chengda Biotechnology on September 28, 2024 and sell it today you would lose (55.00) from holding Liaoning Chengda Biotechnology or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Anhui Huaheng Biotechnology
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Anhui Huaheng Biotec |
Liaoning Chengda and Anhui Huaheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Anhui Huaheng
The main advantage of trading using opposite Liaoning Chengda and Anhui Huaheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Anhui Huaheng 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 Anhui Huaheng will offset losses from the drop in Anhui Huaheng's long position.| Liaoning Chengda vs. Ningxia Building Materials | Liaoning Chengda vs. Chongqing Sulian Plastic | Liaoning Chengda vs. Xizi Clean Energy | Liaoning Chengda vs. GigaDevice SemiconductorBeiji |
| Anhui Huaheng vs. Industrial and Commercial | Anhui Huaheng vs. Agricultural Bank of | Anhui Huaheng vs. China Construction Bank | Anhui Huaheng vs. Bank of China |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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