Correlation Between Shan Loong and Genovate Biotechnology
Can any of the company-specific risk be diversified away by investing in both Shan Loong and Genovate Biotechnology 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 Shan Loong and Genovate Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shan Loong Transportation Co and Genovate Biotechnology Co, you can compare the effects of market volatilities on Shan Loong and Genovate Biotechnology 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 Shan Loong with a short position of Genovate Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shan Loong and Genovate Biotechnology.
Diversification Opportunities for Shan Loong and Genovate Biotechnology
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shan and Genovate is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shan Loong Transportation Co and Genovate Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovate Biotechnology and Shan Loong 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 Shan Loong Transportation Co are associated (or correlated) with Genovate Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovate Biotechnology has no effect on the direction of Shan Loong i.e., Shan Loong and Genovate Biotechnology go up and down completely randomly.
Pair Corralation between Shan Loong and Genovate Biotechnology
Assuming the 90 days trading horizon Shan Loong Transportation Co is expected to under-perform the Genovate Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Shan Loong Transportation Co is 6.37 times less risky than Genovate Biotechnology. The stock trades about -0.14 of its potential returns per unit of risk. The Genovate Biotechnology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,608 in Genovate Biotechnology Co on October 5, 2024 and sell it today you would lose (538.00) from holding Genovate Biotechnology Co or give up 20.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.78% |
Values | Daily Returns |
Shan Loong Transportation Co vs. Genovate Biotechnology Co
Performance |
Timeline |
Shan Loong Transport |
Genovate Biotechnology |
Shan Loong and Genovate Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shan Loong and Genovate Biotechnology
The main advantage of trading using opposite Shan Loong and Genovate Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shan Loong position performs unexpectedly, Genovate Biotechnology 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 Genovate Biotechnology will offset losses from the drop in Genovate Biotechnology's long position.Shan Loong vs. Ability Enterprise Co | Shan Loong vs. Sunplus Technology Co | Shan Loong vs. ALi Corp | Shan Loong vs. Edom Technology Co |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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