Correlation Between Tanke Biosciences and China Health
Can any of the company-specific risk be diversified away by investing in both Tanke Biosciences and China Health 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 Tanke Biosciences and China Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tanke Biosciences and China Health Management, you can compare the effects of market volatilities on Tanke Biosciences and China Health 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 Tanke Biosciences with a short position of China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanke Biosciences and China Health.
Diversification Opportunities for Tanke Biosciences and China Health
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tanke and China is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tanke Biosciences and China Health Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Management and Tanke Biosciences 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 Tanke Biosciences are associated (or correlated) with China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Management has no effect on the direction of Tanke Biosciences i.e., Tanke Biosciences and China Health go up and down completely randomly.
Pair Corralation between Tanke Biosciences and China Health
Given the investment horizon of 90 days Tanke Biosciences is expected to generate 2.59 times more return on investment than China Health. However, Tanke Biosciences is 2.59 times more volatile than China Health Management. It trades about 0.07 of its potential returns per unit of risk. China Health Management is currently generating about 0.07 per unit of risk. If you would invest 5.00 in Tanke Biosciences on August 26, 2024 and sell it today you would lose (4.00) from holding Tanke Biosciences or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tanke Biosciences vs. China Health Management
Performance |
| Timeline |
| Tanke Biosciences |
| China Health Management |
Tanke Biosciences and China Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tanke Biosciences and China Health
The main advantage of trading using opposite Tanke Biosciences and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tanke Biosciences position performs unexpectedly, China Health 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 China Health will offset losses from the drop in China Health's long position.| Tanke Biosciences vs. Absolute Health and | Tanke Biosciences vs. China Health Management | Tanke Biosciences vs. Embrace Change Acquisition | Tanke Biosciences vs. TransAKT |
| China Health vs. Boxlight Corp Class | China Health vs. Siyata Mobile | China Health vs. ClearOne | China Health vs. HUMANA INC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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