Correlation Between Changchun BCHT and China Satellite
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and China Satellite Communications, you can compare the effects of market volatilities on Changchun BCHT and China Satellite 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 Changchun BCHT with a short position of China Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and China Satellite.
Diversification Opportunities for Changchun BCHT and China Satellite
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Changchun and China is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm and Changchun BCHT 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 Changchun BCHT Biotechnology are associated (or correlated) with China Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and China Satellite go up and down completely randomly.
Pair Corralation between Changchun BCHT and China Satellite
Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to under-perform the China Satellite. But the stock apears to be less risky and, when comparing its historical volatility, Changchun BCHT Biotechnology is 1.06 times less risky than China Satellite. The stock trades about -0.08 of its potential returns per unit of risk. The China Satellite Communications is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,777 in China Satellite Communications on September 26, 2024 and sell it today you would earn a total of 369.00 from holding China Satellite Communications or generate 20.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Changchun BCHT Biotechnology vs. China Satellite Communications
Performance |
Timeline |
Changchun BCHT Biote |
China Satellite Comm |
Changchun BCHT and China Satellite Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Changchun BCHT and China Satellite
The main advantage of trading using opposite Changchun BCHT and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, China Satellite 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 Satellite will offset losses from the drop in China Satellite's long position.Changchun BCHT vs. Agricultural Bank of | Changchun BCHT vs. Industrial and Commercial | Changchun BCHT vs. Bank of China | Changchun BCHT vs. China Construction Bank |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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