Correlation Between Jizhong Energy and Hangzhou Huawang
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By analyzing existing cross correlation between Jizhong Energy Resources and Hangzhou Huawang New, you can compare the effects of market volatilities on Jizhong Energy and Hangzhou Huawang 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 Jizhong Energy with a short position of Hangzhou Huawang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jizhong Energy and Hangzhou Huawang.
Diversification Opportunities for Jizhong Energy and Hangzhou Huawang
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jizhong and Hangzhou is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jizhong Energy Resources and Hangzhou Huawang New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Huawang New and Jizhong Energy 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 Jizhong Energy Resources are associated (or correlated) with Hangzhou Huawang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Huawang New has no effect on the direction of Jizhong Energy i.e., Jizhong Energy and Hangzhou Huawang go up and down completely randomly.
Pair Corralation between Jizhong Energy and Hangzhou Huawang
Assuming the 90 days trading horizon Jizhong Energy is expected to generate 1.17 times less return on investment than Hangzhou Huawang. But when comparing it to its historical volatility, Jizhong Energy Resources is 1.18 times less risky than Hangzhou Huawang. It trades about 0.01 of its potential returns per unit of risk. Hangzhou Huawang New is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,215 in Hangzhou Huawang New on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Hangzhou Huawang New or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jizhong Energy Resources vs. Hangzhou Huawang New
Performance |
| Timeline |
| Jizhong Energy Resources |
| Hangzhou Huawang New |
Jizhong Energy and Hangzhou Huawang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jizhong Energy and Hangzhou Huawang
The main advantage of trading using opposite Jizhong Energy and Hangzhou Huawang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jizhong Energy position performs unexpectedly, Hangzhou Huawang 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 Hangzhou Huawang will offset losses from the drop in Hangzhou Huawang's long position.| Jizhong Energy vs. Linewell Software Co | Jizhong Energy vs. China Satellite Communications | Jizhong Energy vs. SUNSEA Telecommunications Co | Jizhong Energy vs. Dhc Software Co |
| Hangzhou Huawang vs. Zijin Mining Group | Hangzhou Huawang vs. Wanhua Chemical Group | Hangzhou Huawang vs. Baoshan Iron Steel | Hangzhou Huawang vs. Shandong Gold Mining |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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