Correlation Between Jiangsu GDK and Shenzhen Bioeasy
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on Jiangsu GDK and Shenzhen Bioeasy 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 Jiangsu GDK with a short position of Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Shenzhen Bioeasy.
Diversification Opportunities for Jiangsu GDK and Shenzhen Bioeasy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Shenzhen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy Bio and Jiangsu GDK 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 Jiangsu GDK Biotechnology are associated (or correlated) with Shenzhen Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of Jiangsu GDK i.e., Jiangsu GDK and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Shenzhen Bioeasy
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to under-perform the Shenzhen Bioeasy. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu GDK Biotechnology is 1.23 times less risky than Shenzhen Bioeasy. The stock trades about -0.53 of its potential returns per unit of risk. The Shenzhen Bioeasy Biotechnology is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest 982.00 in Shenzhen Bioeasy Biotechnology on October 7, 2024 and sell it today you would lose (183.00) from holding Shenzhen Bioeasy Biotechnology or give up 18.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangsu GDK Biotechnology vs. Shenzhen Bioeasy Biotechnology
Performance |
Timeline |
Jiangsu GDK Biotechnology |
Shenzhen Bioeasy Bio |
Jiangsu GDK and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangsu GDK and Shenzhen Bioeasy
The main advantage of trading using opposite Jiangsu GDK and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK position performs unexpectedly, Shenzhen Bioeasy 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 Shenzhen Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.Jiangsu GDK vs. Beijing Jiaman Dress | Jiangsu GDK vs. StarPower Semiconductor | Jiangsu GDK vs. Anhui Huaren Health | Jiangsu GDK vs. Jiangsu Financial Leasing |
Shenzhen Bioeasy vs. Long Yuan Construction | Shenzhen Bioeasy vs. Huaxia Fund Management | Shenzhen Bioeasy vs. Jiugui Liquor Co | Shenzhen Bioeasy vs. Gifore Agricultural Machinery |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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