Correlation Between Tanke Biosciences and New Generation
Can any of the company-specific risk be diversified away by investing in both Tanke Biosciences and New Generation 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 New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tanke Biosciences and New Generation Consumer, you can compare the effects of market volatilities on Tanke Biosciences and New Generation 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 New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanke Biosciences and New Generation.
Diversification Opportunities for Tanke Biosciences and New Generation
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tanke and New is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tanke Biosciences and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer 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 New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of Tanke Biosciences i.e., Tanke Biosciences and New Generation go up and down completely randomly.
Pair Corralation between Tanke Biosciences and New Generation
Given the investment horizon of 90 days Tanke Biosciences is expected to generate 1.89 times more return on investment than New Generation. However, Tanke Biosciences is 1.89 times more volatile than New Generation Consumer. It trades about 0.05 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.03 per unit of risk. If you would invest 15.00 in Tanke Biosciences on September 3, 2024 and sell it today you would lose (14.00) from holding Tanke Biosciences or give up 93.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tanke Biosciences vs. New Generation Consumer
Performance |
Timeline |
Tanke Biosciences |
New Generation Consumer |
Tanke Biosciences and New Generation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tanke Biosciences and New Generation
The main advantage of trading using opposite Tanke Biosciences and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tanke Biosciences position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation's long position.Tanke Biosciences vs. C2E Energy | Tanke Biosciences vs. Supurva Healthcare Group | Tanke Biosciences vs. Kasten Inc | Tanke Biosciences vs. CTR Investments Consulting |
New Generation vs. Xtra Energy Corp | New Generation vs. Arsenal Digital Holdings | New Generation vs. UHF Logistics Group | New Generation vs. XCana Petroleum |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Bonds Directory Find actively traded corporate debentures issued by US companies |