Correlation Between TIANDE CHEMICAL and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both TIANDE CHEMICAL and Lion Biotechnologies 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 TIANDE CHEMICAL and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIANDE CHEMICAL and Lion Biotechnologies, you can compare the effects of market volatilities on TIANDE CHEMICAL and Lion Biotechnologies 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 TIANDE CHEMICAL with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and Lion Biotechnologies.
Diversification Opportunities for TIANDE CHEMICAL and Lion Biotechnologies
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TIANDE and Lion is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and TIANDE CHEMICAL 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 TIANDE CHEMICAL are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between TIANDE CHEMICAL and Lion Biotechnologies
Assuming the 90 days trading horizon TIANDE CHEMICAL is expected to generate 0.61 times more return on investment than Lion Biotechnologies. However, TIANDE CHEMICAL is 1.64 times less risky than Lion Biotechnologies. It trades about 0.06 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about 0.03 per unit of risk. If you would invest 3.08 in TIANDE CHEMICAL on September 21, 2024 and sell it today you would earn a total of 4.17 from holding TIANDE CHEMICAL or generate 135.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIANDE CHEMICAL vs. Lion Biotechnologies
Performance |
| Timeline |
| TIANDE CHEMICAL |
| Lion Biotechnologies |
TIANDE CHEMICAL and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIANDE CHEMICAL and Lion Biotechnologies
The main advantage of trading using opposite TIANDE CHEMICAL and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| TIANDE CHEMICAL vs. Hemisphere Energy Corp | TIANDE CHEMICAL vs. Zoom Video Communications | TIANDE CHEMICAL vs. WillScot Mobile Mini | TIANDE CHEMICAL vs. Iridium Communications |
| Lion Biotechnologies vs. Shin Etsu Chemical Co | Lion Biotechnologies vs. TIANDE CHEMICAL | Lion Biotechnologies vs. SINGAPORE AIRLINES | Lion Biotechnologies vs. Southwest Airlines Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets |