Correlation Between Sichuan Hebang and Kronos Worldwide

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Can any of the company-specific risk be diversified away by investing in both Sichuan Hebang and Kronos Worldwide 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 Sichuan Hebang and Kronos Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Kronos Worldwide, you can compare the effects of market volatilities on Sichuan Hebang and Kronos Worldwide 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 Sichuan Hebang with a short position of Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Kronos Worldwide.

Diversification Opportunities for Sichuan Hebang and Kronos Worldwide

-0.83
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Sichuan and Kronos is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Kronos Worldwide go up and down completely randomly.

Pair Corralation between Sichuan Hebang and Kronos Worldwide

Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to generate 0.77 times more return on investment than Kronos Worldwide. However, Sichuan Hebang Biotechnology is 1.29 times less risky than Kronos Worldwide. It trades about 0.18 of its potential returns per unit of risk. Kronos Worldwide is currently generating about -0.12 per unit of risk. If you would invest  185.00  in Sichuan Hebang Biotechnology on August 14, 2025 and sell it today you would earn a total of  45.00  from holding Sichuan Hebang Biotechnology or generate 24.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy92.06%
ValuesDaily Returns

Sichuan Hebang Biotechnology  vs.  Kronos Worldwide

 Performance 
       Timeline  
Sichuan Hebang Biote 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sichuan Hebang Biotechnology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sichuan Hebang sustained solid returns over the last few months and may actually be approaching a breakup point.
Kronos Worldwide 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Kronos Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sichuan Hebang and Kronos Worldwide Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sichuan Hebang and Kronos Worldwide

The main advantage of trading using opposite Sichuan Hebang and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.
The idea behind Sichuan Hebang Biotechnology and Kronos Worldwide 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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