Correlation Between Tanke Biosciences and Next Meats
Can any of the company-specific risk be diversified away by investing in both Tanke Biosciences and Next Meats 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 Next Meats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tanke Biosciences and Next Meats Holdings, you can compare the effects of market volatilities on Tanke Biosciences and Next Meats 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 Next Meats. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanke Biosciences and Next Meats.
Diversification Opportunities for Tanke Biosciences and Next Meats
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tanke and Next is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tanke Biosciences and Next Meats Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Meats Holdings 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 Next Meats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Meats Holdings has no effect on the direction of Tanke Biosciences i.e., Tanke Biosciences and Next Meats go up and down completely randomly.
Pair Corralation between Tanke Biosciences and Next Meats
Given the investment horizon of 90 days Tanke Biosciences is expected to generate 16.78 times more return on investment than Next Meats. However, Tanke Biosciences is 16.78 times more volatile than Next Meats Holdings. It trades about 0.16 of its potential returns per unit of risk. Next Meats Holdings is currently generating about 0.21 per unit of risk. If you would invest 3.00 in Tanke Biosciences on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Tanke Biosciences or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Tanke Biosciences vs. Next Meats Holdings
Performance |
| Timeline |
| Tanke Biosciences |
| Next Meats Holdings |
Tanke Biosciences and Next Meats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tanke Biosciences and Next Meats
The main advantage of trading using opposite Tanke Biosciences and Next Meats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tanke Biosciences position performs unexpectedly, Next Meats 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 Next Meats will offset losses from the drop in Next Meats' long position.| Tanke Biosciences vs. C2E Energy | Tanke Biosciences vs. Supurva Healthcare Group | Tanke Biosciences vs. Kasten Inc | Tanke Biosciences vs. CTR Investments Consulting |
| Next Meats vs. C2E Energy | Next Meats vs. Tanke Biosciences | Next Meats vs. Supurva Healthcare Group | Next Meats vs. Kasten 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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