Correlation Between Shanrong Biotechnology and Glorywin Entertainment

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

By analyzing existing cross correlation between Shanrong Biotechnology Corp and Glorywin Entertainment Group, you can compare the effects of market volatilities on Shanrong Biotechnology and Glorywin Entertainment 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 Shanrong Biotechnology with a short position of Glorywin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanrong Biotechnology and Glorywin Entertainment.

Diversification Opportunities for Shanrong Biotechnology and Glorywin Entertainment

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Correlation Coefficient

Shanrong Biotechnology  Glorywin Entertainment

Pay attention - limited upside

The 3 months correlation between Shanrong and Glorywin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shanrong Biotechnology Corp and Glorywin Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glorywin Entertainment and Shanrong 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 Shanrong Biotechnology Corp are associated (or correlated) with Glorywin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glorywin Entertainment has no effect on the direction of Shanrong Biotechnology i.e., Shanrong Biotechnology and Glorywin Entertainment go up and down completely randomly.

Pair Corralation between Shanrong Biotechnology and Glorywin Entertainment

Given the investment horizon of 90 days Shanrong Biotechnology Corp is expected to generate 5.75 times more return on investment than Glorywin Entertainment. However, Shanrong Biotechnology is 5.75 times more volatile than Glorywin Entertainment Group. It trades about 0.03 of its potential returns per unit of risk. Glorywin Entertainment Group is currently generating about -0.01 per unit of risk. If you would invest  40.00  in Shanrong Biotechnology Corp on October 9, 2024 and sell it today you would lose (30.40) from holding Shanrong Biotechnology Corp or give up 76.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shanrong Biotechnology Corp  vs.  Glorywin Entertainment Group

Shanrong Biotechnology

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Shanrong Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Glorywin Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glorywin Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Glorywin Entertainment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Shanrong Biotechnology and Glorywin Entertainment

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

The idea behind Shanrong Biotechnology Corp and Glorywin Entertainment Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.