Correlation Between North Huajin and Liuzhou Chemical
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By analyzing existing cross correlation between North Huajin Chemical and Liuzhou Chemical Industry, you can compare the effects of market volatilities on North Huajin and Liuzhou Chemical 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 Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Liuzhou Chemical.
Diversification Opportunities for North Huajin and Liuzhou Chemical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Liuzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Liuzhou Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liuzhou Chemical Industry 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 Liuzhou Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liuzhou Chemical Industry has no effect on the direction of North Huajin i.e., North Huajin and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between North Huajin and Liuzhou Chemical
Assuming the 90 days trading horizon North Huajin Chemical is expected to under-perform the Liuzhou Chemical. But the stock apears to be less risky and, when comparing its historical volatility, North Huajin Chemical is 1.44 times less risky than Liuzhou Chemical. The stock trades about -0.14 of its potential returns per unit of risk. The Liuzhou Chemical Industry is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Liuzhou Chemical Industry on September 29, 2024 and sell it today you would lose (13.00) from holding Liuzhou Chemical Industry or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| North Huajin Chemical |
| Liuzhou Chemical Industry |
North Huajin and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Liuzhou Chemical
The main advantage of trading using opposite North Huajin and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Liuzhou Chemical 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 Liuzhou Chemical will offset losses from the drop in Liuzhou Chemical's long position.| North Huajin vs. Qtone Education Group | North Huajin vs. Zhangjiagang Freetrade Science | North Huajin vs. Beijing Kaiwen Education | North Huajin vs. Gansu Huangtai Wine marketing |
| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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