Correlation Between SynCore Biotechnology and China Development

Can any of the company-specific risk be diversified away by investing in both SynCore Biotechnology and China Development 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 SynCore Biotechnology and China Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SynCore Biotechnology Co and China Development Financial, you can compare the effects of market volatilities on SynCore Biotechnology and China Development 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 SynCore Biotechnology with a short position of China Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of SynCore Biotechnology and China Development.

Diversification Opportunities for SynCore Biotechnology and China Development

-0.68

Correlation Coefficient

SynCore Biotechnology  China Development

Excellent diversification

The 3 months correlation between SynCore and China is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SynCore Biotechnology Co and China Development Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Development and SynCore Biotechnology 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 SynCore Biotechnology Co are associated (or correlated) with China Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Development has no effect on the direction of SynCore Biotechnology i.e., SynCore Biotechnology and China Development go up and down completely randomly.

Pair Corralation between SynCore Biotechnology and China Development

Assuming the 90 days trading horizon SynCore Biotechnology is expected to generate 4.38 times less return on investment than China Development. In addition to that, SynCore Biotechnology is 2.88 times more volatile than China Development Financial. It trades about 0.01 of its total potential returns per unit of risk. China Development Financial is currently generating about 0.08 per unit of volatility. If you would invest  1,720  in China Development Financial on September 29, 2024 and sell it today you would earn a total of  35.00  from holding China Development Financial or generate 2.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SynCore Biotechnology Co  vs.  China Development Financial

SynCore Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SynCore Biotechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

China Development

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Development Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, China Development may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SynCore Biotechnology and China Development

The main advantage of trading using opposite SynCore Biotechnology and China Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SynCore Biotechnology position performs unexpectedly, China Development 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 China Development will offset losses from the drop in China Development's long position.

The idea behind SynCore Biotechnology Co and China Development Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.