Correlation Between North Huajin and Hubei Dinglong
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By analyzing existing cross correlation between North Huajin Chemical and Hubei Dinglong Chemical, you can compare the effects of market volatilities on North Huajin and Hubei Dinglong 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 Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Hubei Dinglong.
Diversification Opportunities for North Huajin and Hubei Dinglong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between North and Hubei is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong Chemical 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 Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of North Huajin i.e., North Huajin and Hubei Dinglong go up and down completely randomly.
Pair Corralation between North Huajin and Hubei Dinglong
Assuming the 90 days trading horizon North Huajin is expected to generate 1.06 times less return on investment than Hubei Dinglong. But when comparing it to its historical volatility, North Huajin Chemical is 1.06 times less risky than Hubei Dinglong. It trades about 0.18 of its potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,905 in Hubei Dinglong Chemical on August 28, 2024 and sell it today you would earn a total of 806.00 from holding Hubei Dinglong Chemical or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Hubei Dinglong Chemical
Performance |
| Timeline |
| North Huajin Chemical |
| Hubei Dinglong Chemical |
North Huajin and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Hubei Dinglong
The main advantage of trading using opposite North Huajin and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong's 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 |
| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong vs. Rongsheng Petrochemical Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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