Correlation Between Bohai Leasing and Hefei Metalforming
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By analyzing existing cross correlation between Bohai Leasing Co and Hefei Metalforming Mach, you can compare the effects of market volatilities on Bohai Leasing and Hefei Metalforming 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 Bohai Leasing with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohai Leasing and Hefei Metalforming.
Diversification Opportunities for Bohai Leasing and Hefei Metalforming
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bohai and Hefei is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bohai Leasing Co and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and Bohai Leasing 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 Bohai Leasing Co are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Bohai Leasing i.e., Bohai Leasing and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Bohai Leasing and Hefei Metalforming
Assuming the 90 days trading horizon Bohai Leasing Co is expected to generate 0.83 times more return on investment than Hefei Metalforming. However, Bohai Leasing Co is 1.2 times less risky than Hefei Metalforming. It trades about 0.07 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.01 per unit of risk. If you would invest 219.00 in Bohai Leasing Co on October 16, 2024 and sell it today you would earn a total of 121.00 from holding Bohai Leasing Co or generate 55.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bohai Leasing Co vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Bohai Leasing |
| Hefei Metalforming Mach |
Bohai Leasing and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bohai Leasing and Hefei Metalforming
The main advantage of trading using opposite Bohai Leasing and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bohai Leasing position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Bohai Leasing vs. Runjian Communication Co | Bohai Leasing vs. Chengdu Xinzhu RoadBridge | Bohai Leasing vs. Hunan TV Broadcast | Bohai Leasing vs. Nanjing Putian Telecommunications |
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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