Correlation Between North Huajin and Guobo Electronics
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By analyzing existing cross correlation between North Huajin Chemical and Guobo Electronics Co, you can compare the effects of market volatilities on North Huajin and Guobo Electronics 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 Guobo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Guobo Electronics.
Diversification Opportunities for North Huajin and Guobo Electronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Guobo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Guobo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guobo Electronics 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 Guobo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guobo Electronics has no effect on the direction of North Huajin i.e., North Huajin and Guobo Electronics go up and down completely randomly.
Pair Corralation between North Huajin and Guobo Electronics
Assuming the 90 days trading horizon North Huajin Chemical is expected to under-perform the Guobo Electronics. But the stock apears to be less risky and, when comparing its historical volatility, North Huajin Chemical is 1.09 times less risky than Guobo Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Guobo Electronics Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,323 in Guobo Electronics Co on September 30, 2024 and sell it today you would lose (1,481) from holding Guobo Electronics Co or give up 23.42% 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. Guobo Electronics Co
Performance |
| Timeline |
| North Huajin Chemical |
| Guobo Electronics |
North Huajin and Guobo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Guobo Electronics
The main advantage of trading using opposite North Huajin and Guobo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Guobo Electronics 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 Guobo Electronics will offset losses from the drop in Guobo Electronics' 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 |
| Guobo Electronics vs. Industrial and Commercial | Guobo Electronics vs. China Construction Bank | Guobo Electronics vs. Agricultural Bank of | Guobo Electronics vs. Bank of China |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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