Correlation Between Tanke Biosciences and Church Crawford

Can any of the company-specific risk be diversified away by investing in both Tanke Biosciences and Church Crawford 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 Tanke Biosciences and Church Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tanke Biosciences and Church Crawford, you can compare the effects of market volatilities on Tanke Biosciences and Church Crawford 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 Tanke Biosciences with a short position of Church Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanke Biosciences and Church Crawford.

Diversification Opportunities for Tanke Biosciences and Church Crawford

-0.04

Correlation Coefficient

Tanke Biosciences  Church Crawford

Good diversification

The 3 months correlation between Tanke and Church is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tanke Biosciences and Church Crawford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Crawford and Tanke Biosciences 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 Tanke Biosciences are associated (or correlated) with Church Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Crawford has no effect on the direction of Tanke Biosciences i.e., Tanke Biosciences and Church Crawford go up and down completely randomly.

Pair Corralation between Tanke Biosciences and Church Crawford

Given the investment horizon of 90 days Tanke Biosciences is expected to generate 4.13 times more return on investment than Church Crawford. However, Tanke Biosciences is 4.13 times more volatile than Church Crawford. It trades about 0.11 of its potential returns per unit of risk. Church Crawford is currently generating about 0.09 per unit of risk. If you would invest  0.75  in Tanke Biosciences on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Tanke Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Tanke Biosciences  vs.  Church Crawford

Tanke Biosciences

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tanke Biosciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Tanke Biosciences demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Church Crawford

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Church Crawford are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Church Crawford reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tanke Biosciences and Church Crawford

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

The idea behind Tanke Biosciences and Church Crawford 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.