Correlation Between Xiangyang Automobile and Hengkang Medical
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Hengkang Medical Group, you can compare the effects of market volatilities on Xiangyang Automobile and Hengkang Medical 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 Xiangyang Automobile with a short position of Hengkang Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Hengkang Medical.
Diversification Opportunities for Xiangyang Automobile and Hengkang Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Hengkang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Hengkang Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengkang Medical and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Hengkang Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengkang Medical has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Hengkang Medical go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Hengkang Medical
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.2 times more return on investment than Hengkang Medical. However, Xiangyang Automobile is 1.2 times more volatile than Hengkang Medical Group. It trades about 0.01 of its potential returns per unit of risk. Hengkang Medical Group is currently generating about -0.03 per unit of risk. If you would invest 641.00 in Xiangyang Automobile Bearing on November 7, 2024 and sell it today you would lose (29.00) from holding Xiangyang Automobile Bearing or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Hengkang Medical Group
Performance |
| Timeline |
| Xiangyang Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hengkang Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xiangyang Automobile and Hengkang Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Hengkang Medical
The main advantage of trading using opposite Xiangyang Automobile and Hengkang Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Hengkang Medical 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 Hengkang Medical will offset losses from the drop in Hengkang Medical's long position.The idea behind Xiangyang Automobile Bearing and Hengkang Medical Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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