Correlation Between China Securities and Hefei Metalforming
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By analyzing existing cross correlation between China Securities 800 and Hefei Metalforming Mach, you can compare the effects of market volatilities on China Securities and Hefei Metalforming 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 China Securities with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Hefei Metalforming.
Diversification Opportunities for China Securities and Hefei Metalforming
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Hefei is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and China Securities 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 China Securities 800 are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of China Securities i.e., China Securities and Hefei Metalforming go up and down completely randomly.
Pair Corralation between China Securities and Hefei Metalforming
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Hefei Metalforming. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 2.45 times less risky than Hefei Metalforming. The index trades about -0.03 of its potential returns per unit of risk. The Hefei Metalforming Mach is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 741.00 in Hefei Metalforming Mach on August 25, 2024 and sell it today you would earn a total of 79.00 from holding Hefei Metalforming Mach or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Hefei Metalforming Mach
Performance |
| Timeline |
China Securities and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Hefei Metalforming Mach
Pair trading matchups for Hefei Metalforming
Pair Trading with China Securities and Hefei Metalforming
The main advantage of trading using opposite China Securities and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| China Securities vs. Zhejiang Yayi Metal | China Securities vs. Huatian Hotel Group | China Securities vs. Semiconductor Manufacturing Electronics | China Securities vs. Dalian Thermal Power |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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