Correlation Between Hengli Industrial and Liuzhou Chemical
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By analyzing existing cross correlation between Hengli Industrial Development and Liuzhou Chemical Industry, you can compare the effects of market volatilities on Hengli Industrial 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 Hengli Industrial with a short position of Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Liuzhou Chemical.
Diversification Opportunities for Hengli Industrial and Liuzhou Chemical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengli and Liuzhou is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development 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 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 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 Hengli Industrial i.e., Hengli Industrial and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between Hengli Industrial and Liuzhou Chemical
Assuming the 90 days trading horizon Hengli Industrial Development is expected to under-perform the Liuzhou Chemical. In addition to that, Hengli Industrial is 1.35 times more volatile than Liuzhou Chemical Industry. It trades about -0.03 of its total potential returns per unit of risk. Liuzhou Chemical Industry is currently generating about 0.0 per unit of volatility. If you would invest 367.00 in Liuzhou Chemical Industry on September 4, 2024 and sell it today you would lose (54.00) from holding Liuzhou Chemical Industry or give up 14.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| Hengli Industrial |
| Liuzhou Chemical Industry |
Hengli Industrial and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Liuzhou Chemical
The main advantage of trading using opposite Hengli Industrial and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial 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.| Hengli Industrial vs. Cultural Investment Holdings | Hengli Industrial vs. Gome Telecom Equipment | Hengli Industrial vs. Bus Online Co | Hengli Industrial vs. Holitech Technology Co |
| Liuzhou Chemical vs. Ningbo Construction Co | Liuzhou Chemical vs. Quectel Wireless Solutions | Liuzhou Chemical vs. Anhui Huilong Agricultural | Liuzhou Chemical vs. Shanghai Rongtai Health |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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