Correlation Between Sichuan Hebang and Kuangda Technology
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Kuangda Technology Group, you can compare the effects of market volatilities on Sichuan Hebang and Kuangda Technology 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 Sichuan Hebang with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Kuangda Technology.
Diversification Opportunities for Sichuan Hebang and Kuangda Technology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Kuangda is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Kuangda Technology go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Kuangda Technology
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to generate 0.83 times more return on investment than Kuangda Technology. However, Sichuan Hebang Biotechnology is 1.21 times less risky than Kuangda Technology. It trades about -0.11 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about -0.3 per unit of risk. If you would invest 210.00 in Sichuan Hebang Biotechnology on October 5, 2024 and sell it today you would lose (15.00) from holding Sichuan Hebang Biotechnology or give up 7.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Kuangda Technology Group
Performance |
Timeline |
Sichuan Hebang Biote |
Kuangda Technology |
Sichuan Hebang and Kuangda Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sichuan Hebang and Kuangda Technology
The main advantage of trading using opposite Sichuan Hebang and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.Sichuan Hebang vs. Zijin Mining Group | Sichuan Hebang vs. Wanhua Chemical Group | Sichuan Hebang vs. Baoshan Iron Steel | Sichuan Hebang vs. Shandong Gold Mining |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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