Correlation Between Henan Shuanghui and Changchun
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By analyzing existing cross correlation between Henan Shuanghui Investment and Changchun UP Optotech, you can compare the effects of market volatilities on Henan Shuanghui and Changchun 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 Henan Shuanghui with a short position of Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Shuanghui and Changchun.
Diversification Opportunities for Henan Shuanghui and Changchun
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Henan and Changchun is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Henan Shuanghui Investment and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech and Henan Shuanghui 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 Henan Shuanghui Investment are associated (or correlated) with Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Henan Shuanghui i.e., Henan Shuanghui and Changchun go up and down completely randomly.
Pair Corralation between Henan Shuanghui and Changchun
Assuming the 90 days trading horizon Henan Shuanghui is expected to generate 9.02 times less return on investment than Changchun. But when comparing it to its historical volatility, Henan Shuanghui Investment is 3.15 times less risky than Changchun. It trades about 0.02 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,271 in Changchun UP Optotech on October 14, 2024 and sell it today you would earn a total of 317.00 from holding Changchun UP Optotech or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henan Shuanghui Investment vs. Changchun UP Optotech
Performance |
| Timeline |
| Henan Shuanghui Inve |
| Changchun UP Optotech |
Henan Shuanghui and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henan Shuanghui and Changchun
The main advantage of trading using opposite Henan Shuanghui and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Shuanghui position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Henan Shuanghui vs. Harvest Fund Management | Henan Shuanghui vs. Great Sun Foods Co | Henan Shuanghui vs. Dalian Thermal Power | Henan Shuanghui vs. Guangdong Wens Foodstuff |
| Changchun vs. Shenyang Blue Silver | Changchun vs. Gem Year Industrial Co | Changchun vs. Qingdao Choho Industrial | Changchun vs. Tonghua Grape Wine |
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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