Correlation Between Shanghai Rendu and Zhongyin Babi
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By analyzing existing cross correlation between Shanghai Rendu Biotechnology and Zhongyin Babi Food, you can compare the effects of market volatilities on Shanghai Rendu and Zhongyin Babi 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 Shanghai Rendu with a short position of Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rendu and Zhongyin Babi.
Diversification Opportunities for Shanghai Rendu and Zhongyin Babi
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Zhongyin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rendu Biotechnology and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food and Shanghai Rendu 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 Shanghai Rendu Biotechnology are associated (or correlated) with Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of Shanghai Rendu i.e., Shanghai Rendu and Zhongyin Babi go up and down completely randomly.
Pair Corralation between Shanghai Rendu and Zhongyin Babi
Assuming the 90 days trading horizon Shanghai Rendu Biotechnology is expected to under-perform the Zhongyin Babi. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Rendu Biotechnology is 1.4 times less risky than Zhongyin Babi. The stock trades about -0.14 of its potential returns per unit of risk. The Zhongyin Babi Food is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,610 in Zhongyin Babi Food on September 26, 2024 and sell it today you would earn a total of 181.00 from holding Zhongyin Babi Food or generate 11.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Rendu Biotechnology vs. Zhongyin Babi Food
Performance |
Timeline |
Shanghai Rendu Biote |
Zhongyin Babi Food |
Shanghai Rendu and Zhongyin Babi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Rendu and Zhongyin Babi
The main advantage of trading using opposite Shanghai Rendu and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rendu position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.Shanghai Rendu vs. Industrial and Commercial | Shanghai Rendu vs. Agricultural Bank of | Shanghai Rendu vs. China Construction Bank | Shanghai Rendu vs. Bank of China |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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