Correlation Between China Health and Biopower Operations
Can any of the company-specific risk be diversified away by investing in both China Health and Biopower Operations at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Health and Biopower Operations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Industries and Biopower Operations Corp, you can compare the effects of market volatilities on China Health and Biopower Operations 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 China Health with a short position of Biopower Operations. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Biopower Operations.
Diversification Opportunities for China Health and Biopower Operations
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Biopower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Health Industries and Biopower Operations Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biopower Operations Corp and China Health 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 China Health Industries are associated (or correlated) with Biopower Operations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biopower Operations Corp has no effect on the direction of China Health i.e., China Health and Biopower Operations go up and down completely randomly.
Pair Corralation between China Health and Biopower Operations
Given the investment horizon of 90 days China Health Industries is expected to generate 3.52 times more return on investment than Biopower Operations. However, China Health is 3.52 times more volatile than Biopower Operations Corp. It trades about 0.07 of its potential returns per unit of risk. Biopower Operations Corp is currently generating about 0.01 per unit of risk. If you would invest 15.00 in China Health Industries on September 12, 2024 and sell it today you would earn a total of 13.00 from holding China Health Industries or generate 86.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Health Industries vs. Biopower Operations Corp
Performance |
| Timeline |
| China Health Industries |
| Biopower Operations Corp |
China Health and Biopower Operations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Biopower Operations
The main advantage of trading using opposite China Health and Biopower Operations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Biopower Operations 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 Biopower Operations will offset losses from the drop in Biopower Operations' long position.| China Health vs. V Group | China Health vs. Fbec Worldwide | China Health vs. Hiru Corporation | China Health vs. Alkame Holdings |
| Biopower Operations vs. POSCO Holdings | Biopower Operations vs. Schweizerische Nationalbank | Biopower Operations vs. Berkshire Hathaway | Biopower Operations vs. Berkshire Hathaway |
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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