Correlation Between Shenyang Huitian and Hubei Huaqiang
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By analyzing existing cross correlation between Shenyang Huitian Thermal and Hubei Huaqiang High Tech, you can compare the effects of market volatilities on Shenyang Huitian and Hubei Huaqiang 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 Shenyang Huitian with a short position of Hubei Huaqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Hubei Huaqiang.
Diversification Opportunities for Shenyang Huitian and Hubei Huaqiang
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Hubei is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Hubei Huaqiang High Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Huaqiang High and Shenyang Huitian 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 Shenyang Huitian Thermal are associated (or correlated) with Hubei Huaqiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Huaqiang High has no effect on the direction of Shenyang Huitian i.e., Shenyang Huitian and Hubei Huaqiang go up and down completely randomly.
Pair Corralation between Shenyang Huitian and Hubei Huaqiang
Assuming the 90 days trading horizon Shenyang Huitian Thermal is expected to generate 1.22 times more return on investment than Hubei Huaqiang. However, Shenyang Huitian is 1.22 times more volatile than Hubei Huaqiang High Tech. It trades about 0.09 of its potential returns per unit of risk. Hubei Huaqiang High Tech is currently generating about 0.04 per unit of risk. If you would invest 248.00 in Shenyang Huitian Thermal on September 3, 2024 and sell it today you would earn a total of 122.00 from holding Shenyang Huitian Thermal or generate 49.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.38% |
| Values | Daily Returns |
Shenyang Huitian Thermal vs. Hubei Huaqiang High Tech
Performance |
| Timeline |
| Shenyang Huitian Thermal |
| Hubei Huaqiang High |
Shenyang Huitian and Hubei Huaqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Huitian and Hubei Huaqiang
The main advantage of trading using opposite Shenyang Huitian and Hubei Huaqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian position performs unexpectedly, Hubei Huaqiang 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 Hubei Huaqiang will offset losses from the drop in Hubei Huaqiang's long position.| Shenyang Huitian vs. Industrial and Commercial | Shenyang Huitian vs. Agricultural Bank of | Shenyang Huitian vs. China Construction Bank | Shenyang Huitian vs. Bank of China |
| Hubei Huaqiang vs. Xinjiang Communications Construction | Hubei Huaqiang vs. Zhongtong Guomai Communication | Hubei Huaqiang vs. Zhejiang Publishing Media | Hubei Huaqiang vs. Northern United Publishing |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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