Correlation Between Hengli Industrial and Fuda Alloy
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By analyzing existing cross correlation between Hengli Industrial Development and Fuda Alloy Materials, you can compare the effects of market volatilities on Hengli Industrial and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Fuda Alloy.
Diversification Opportunities for Hengli Industrial and Fuda Alloy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengli and Fuda is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Fuda Alloy go up and down completely randomly.
Pair Corralation between Hengli Industrial and Fuda Alloy
Assuming the 90 days trading horizon Hengli Industrial is expected to generate 1.13 times less return on investment than Fuda Alloy. But when comparing it to its historical volatility, Hengli Industrial Development is 1.17 times less risky than Fuda Alloy. It trades about 0.07 of its potential returns per unit of risk. Fuda Alloy Materials is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,361 in Fuda Alloy Materials on October 17, 2024 and sell it today you would earn a total of 60.00 from holding Fuda Alloy Materials or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Fuda Alloy Materials
Performance |
| Timeline |
| Hengli Industrial |
| Fuda Alloy Materials |
Hengli Industrial and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Fuda Alloy
The main advantage of trading using opposite Hengli Industrial and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| Hengli Industrial vs. Xinjiang Baodi Mining | Hengli Industrial vs. Ningbo Fujia Industrial | Hengli Industrial vs. Tibet Huayu Mining | Hengli Industrial vs. Unisplendour Corp |
| Fuda Alloy vs. Guangzhou Haozhi Industrial | Fuda Alloy vs. Hengli Industrial Development | Fuda Alloy vs. Rising Nonferrous Metals | Fuda Alloy vs. Ziel Home Furnishing |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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