Correlation Between Changchun BCHT and Jinhe Biotechnology

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

Diversification Opportunities for Changchun BCHT and Jinhe Biotechnology

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Changchun and Jinhe is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Jinhe Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhe Biotechnology and Changchun BCHT 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 Changchun BCHT Biotechnology are associated (or correlated) with Jinhe Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhe Biotechnology has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Jinhe Biotechnology go up and down completely randomly.

Pair Corralation between Changchun BCHT and Jinhe Biotechnology

Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to generate 1.01 times more return on investment than Jinhe Biotechnology. However, Changchun BCHT is 1.01 times more volatile than Jinhe Biotechnology Co. It trades about -0.12 of its potential returns per unit of risk. Jinhe Biotechnology Co is currently generating about -0.15 per unit of risk. If you would invest  2,314  in Changchun BCHT Biotechnology on September 11, 2025 and sell it today you would lose (262.00) from holding Changchun BCHT Biotechnology or give up 11.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Changchun BCHT Biotechnology  vs.  Jinhe Biotechnology Co

 Performance 
       Timeline  
Changchun BCHT Biote 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Changchun BCHT Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Jinhe Biotechnology 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Jinhe Biotechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the company investors.

Changchun BCHT and Jinhe Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Changchun BCHT and Jinhe Biotechnology

The main advantage of trading using opposite Changchun BCHT and Jinhe Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Jinhe Biotechnology 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 Jinhe Biotechnology will offset losses from the drop in Jinhe Biotechnology's long position.
The idea behind Changchun BCHT Biotechnology and Jinhe Biotechnology Co 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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