Correlation Between Wuhan General and Cannara Biotech
Can any of the company-specific risk be diversified away by investing in both Wuhan General and Cannara Biotech 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 Wuhan General and Cannara Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wuhan General Gr and Cannara Biotech, you can compare the effects of market volatilities on Wuhan General and Cannara Biotech 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 Wuhan General with a short position of Cannara Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan General and Cannara Biotech.
Diversification Opportunities for Wuhan General and Cannara Biotech
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Cannara is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan General Gr and Cannara Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannara Biotech and Wuhan General 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 Wuhan General Gr are associated (or correlated) with Cannara Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannara Biotech has no effect on the direction of Wuhan General i.e., Wuhan General and Cannara Biotech go up and down completely randomly.
Pair Corralation between Wuhan General and Cannara Biotech
If you would invest 51.00 in Cannara Biotech on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Cannara Biotech or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Wuhan General Gr vs. Cannara Biotech
Performance |
| Timeline |
| Wuhan General Gr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cannara Biotech |
Wuhan General and Cannara Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan General and Cannara Biotech
The main advantage of trading using opposite Wuhan General and Cannara Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan General position performs unexpectedly, Cannara Biotech 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 Cannara Biotech will offset losses from the drop in Cannara Biotech's long position.| Wuhan General vs. Biome Grow | Wuhan General vs. Halo Collective | Wuhan General vs. Cannara Biotech | Wuhan General vs. Avicanna |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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