Correlation Between Chin Yang and Cytogen
Can any of the company-specific risk be diversified away by investing in both Chin Yang and Cytogen 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 Chin Yang and Cytogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and Cytogen, you can compare the effects of market volatilities on Chin Yang and Cytogen 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 Chin Yang with a short position of Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Cytogen.
Diversification Opportunities for Chin Yang and Cytogen
Weak diversification
The 3 months correlation between Chin and Cytogen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of Chin Yang i.e., Chin Yang and Cytogen go up and down completely randomly.
Pair Corralation between Chin Yang and Cytogen
Assuming the 90 days trading horizon Chin Yang Chemical is expected to generate 0.91 times more return on investment than Cytogen. However, Chin Yang Chemical is 1.1 times less risky than Cytogen. It trades about -0.05 of its potential returns per unit of risk. Cytogen is currently generating about -0.4 per unit of risk. If you would invest 273,500 in Chin Yang Chemical on September 8, 2024 and sell it today you would lose (22,500) from holding Chin Yang Chemical or give up 8.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Chin Yang Chemical vs. Cytogen
Performance |
Timeline |
Chin Yang Chemical |
Cytogen |
Chin Yang and Cytogen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chin Yang and Cytogen
The main advantage of trading using opposite Chin Yang and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.Chin Yang vs. Daishin Information Communications | Chin Yang vs. Alton Sports CoLtd | Chin Yang vs. Hanjin Transportation Co | Chin Yang vs. Shinsegae Information Communication |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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