Correlation Between Hunan Investment and Liaoning Dingjide
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By analyzing existing cross correlation between Hunan Investment Group and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Hunan Investment and Liaoning Dingjide 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 Hunan Investment with a short position of Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Liaoning Dingjide.
Diversification Opportunities for Hunan Investment and Liaoning Dingjide
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunan and Liaoning is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Hunan Investment i.e., Hunan Investment and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Hunan Investment and Liaoning Dingjide
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 0.95 times more return on investment than Liaoning Dingjide. However, Hunan Investment Group is 1.05 times less risky than Liaoning Dingjide. It trades about 0.02 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about 0.0 per unit of risk. If you would invest 508.00 in Hunan Investment Group on October 17, 2024 and sell it today you would earn a total of 0.00 from holding Hunan Investment Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Hunan Investment |
| Liaoning Dingjide |
Hunan Investment and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and Liaoning Dingjide
The main advantage of trading using opposite Hunan Investment and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Hunan Investment vs. Liaoning Dingjide Petrochemical | Hunan Investment vs. Dosilicon Co | Hunan Investment vs. Postal Savings Bank | Hunan Investment vs. China Asset Management |
| Liaoning Dingjide vs. Hunan Investment Group | Liaoning Dingjide vs. Zoje Resources Investment | Liaoning Dingjide vs. Jinhui Mining Co | Liaoning Dingjide vs. Zhejiang Kingland Pipeline |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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