Correlation Between China Securities and Bright Dairy
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By analyzing existing cross correlation between China Securities 800 and Bright Dairy Food, you can compare the effects of market volatilities on China Securities and Bright Dairy 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 China Securities with a short position of Bright Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Bright Dairy.
Diversification Opportunities for China Securities and Bright Dairy
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Bright is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Bright Dairy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Dairy Food and China Securities 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 China Securities 800 are associated (or correlated) with Bright Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Dairy Food has no effect on the direction of China Securities i.e., China Securities and Bright Dairy go up and down completely randomly.
Pair Corralation between China Securities and Bright Dairy
Assuming the 90 days trading horizon China Securities is expected to generate 1.11 times less return on investment than Bright Dairy. But when comparing it to its historical volatility, China Securities 800 is 1.05 times less risky than Bright Dairy. It trades about 0.18 of its potential returns per unit of risk. Bright Dairy Food is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 729.00 in Bright Dairy Food on September 17, 2024 and sell it today you would earn a total of 218.00 from holding Bright Dairy Food or generate 29.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Securities 800 vs. Bright Dairy Food
Performance |
Timeline |
China Securities and Bright Dairy Volatility Contrast
Predicted Return Density |
Returns |
China Securities 800
Pair trading matchups for China Securities
Bright Dairy Food
Pair trading matchups for Bright Dairy
Pair Trading with China Securities and Bright Dairy
The main advantage of trading using opposite China Securities and Bright Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Bright Dairy 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 Bright Dairy will offset losses from the drop in Bright Dairy's long position.China Securities vs. Hubei Dinglong Chemical | China Securities vs. Beijing HuaYuanYiTong Thermal | China Securities vs. Ningbo Thermal Power | China Securities vs. Shenzhen Noposion Agrochemicals |
Bright Dairy vs. Dymatic Chemicals | Bright Dairy vs. Shaanxi Broadcast TV | Bright Dairy vs. Qtone Education Group | Bright Dairy vs. Anhui Transport Consulting |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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