Correlation Between North Huajin and Dymatic Chemicals
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By analyzing existing cross correlation between North Huajin Chemical and Dymatic Chemicals, you can compare the effects of market volatilities on North Huajin and Dymatic Chemicals 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 North Huajin with a short position of Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Dymatic Chemicals.
Diversification Opportunities for North Huajin and Dymatic Chemicals
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between North and Dymatic is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals and North Huajin 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 North Huajin Chemical are associated (or correlated) with Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of North Huajin i.e., North Huajin and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between North Huajin and Dymatic Chemicals
Assuming the 90 days trading horizon North Huajin Chemical is expected to under-perform the Dymatic Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, North Huajin Chemical is 1.14 times less risky than Dymatic Chemicals. The stock trades about -0.03 of its potential returns per unit of risk. The Dymatic Chemicals is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Dymatic Chemicals on August 28, 2024 and sell it today you would earn a total of 201.00 from holding Dymatic Chemicals or generate 35.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Dymatic Chemicals
Performance |
| Timeline |
| North Huajin Chemical |
| Dymatic Chemicals |
North Huajin and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Dymatic Chemicals
The main advantage of trading using opposite North Huajin and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
| Dymatic Chemicals vs. Zijin Mining Group | Dymatic Chemicals vs. Wanhua Chemical Group | Dymatic Chemicals vs. Baoshan Iron Steel | Dymatic Chemicals vs. Shandong Gold Mining |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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