Correlation Between Hengli Industrial and Lianhe Chemical
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By analyzing existing cross correlation between Hengli Industrial Development and Lianhe Chemical Technology, you can compare the effects of market volatilities on Hengli Industrial and Lianhe 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 Hengli Industrial with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Lianhe Chemical.
Diversification Opportunities for Hengli Industrial and Lianhe Chemical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hengli and Lianhe is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and Hengli Industrial 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 Hengli Industrial Development are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Hengli Industrial and Lianhe Chemical
Assuming the 90 days trading horizon Hengli Industrial Development is expected to under-perform the Lianhe Chemical. In addition to that, Hengli Industrial is 1.5 times more volatile than Lianhe Chemical Technology. It trades about -0.04 of its total potential returns per unit of risk. Lianhe Chemical Technology is currently generating about -0.03 per unit of volatility. If you would invest 696.00 in Lianhe Chemical Technology on October 16, 2024 and sell it today you would lose (181.00) from holding Lianhe Chemical Technology or give up 26.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Hengli Industrial |
| Lianhe Chemical Tech |
Hengli Industrial and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Lianhe Chemical
The main advantage of trading using opposite Hengli Industrial and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Lianhe 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Hengli Industrial vs. Shanghai Material Trading | Hengli Industrial vs. Jointo Energy Investment | Hengli Industrial vs. Beijing Mainstreets Investment | Hengli Industrial vs. Hubei Geoway Investment |
| Lianhe Chemical vs. Bosera CMSK Industrial | Lianhe Chemical vs. Hengli Industrial Development | Lianhe Chemical vs. Universal Scientific Industrial | Lianhe Chemical vs. Hengdian Entertainment 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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