Correlation Between China Pharma and Sunshine Biopharma
Can any of the company-specific risk be diversified away by investing in both China Pharma and Sunshine Biopharma 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 Pharma and Sunshine Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Pharma Holdings and Sunshine Biopharma Warrant, you can compare the effects of market volatilities on China Pharma and Sunshine Biopharma 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 Pharma with a short position of Sunshine Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Pharma and Sunshine Biopharma.
Diversification Opportunities for China Pharma and Sunshine Biopharma
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Sunshine is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Pharma Holdings and Sunshine Biopharma Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunshine Biopharma and China Pharma 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 Pharma Holdings are associated (or correlated) with Sunshine Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunshine Biopharma has no effect on the direction of China Pharma i.e., China Pharma and Sunshine Biopharma go up and down completely randomly.
Pair Corralation between China Pharma and Sunshine Biopharma
Given the investment horizon of 90 days China Pharma is expected to generate 8.68 times less return on investment than Sunshine Biopharma. But when comparing it to its historical volatility, China Pharma Holdings is 1.58 times less risky than Sunshine Biopharma. It trades about 0.03 of its potential returns per unit of risk. Sunshine Biopharma Warrant is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Sunshine Biopharma Warrant on November 4, 2024 and sell it today you would earn a total of 5.00 from holding Sunshine Biopharma Warrant or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
China Pharma Holdings vs. Sunshine Biopharma Warrant
Performance |
| Timeline |
| China Pharma Holdings |
| Sunshine Biopharma |
China Pharma and Sunshine Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Pharma and Sunshine Biopharma
The main advantage of trading using opposite China Pharma and Sunshine Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Pharma position performs unexpectedly, Sunshine Biopharma 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 Sunshine Biopharma will offset losses from the drop in Sunshine Biopharma's long position.| China Pharma vs. Agilent Technologies | China Pharma vs. Equillium | China Pharma vs. 23Andme Holding Co | China Pharma vs. DiaMedica Therapeutics |
| Sunshine Biopharma vs. Sunshine Biopharma | Sunshine Biopharma vs. Thayer Ventures Acquisition | Sunshine Biopharma vs. Biofrontera Warrants | Sunshine Biopharma vs. Neurosense Therapeutics |
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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