Correlation Between Fujian Newland and Weihai Honglin
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By analyzing existing cross correlation between Fujian Newland Computer and Weihai Honglin Electronic, you can compare the effects of market volatilities on Fujian Newland and Weihai Honglin 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 Fujian Newland with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and Weihai Honglin.
Diversification Opportunities for Fujian Newland and Weihai Honglin
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fujian and Weihai is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Fujian Newland i.e., Fujian Newland and Weihai Honglin go up and down completely randomly.
Pair Corralation between Fujian Newland and Weihai Honglin
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 0.98 times more return on investment than Weihai Honglin. However, Fujian Newland Computer is 1.02 times less risky than Weihai Honglin. It trades about 0.03 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.01 per unit of risk. If you would invest 1,718 in Fujian Newland Computer on October 16, 2024 and sell it today you would earn a total of 267.00 from holding Fujian Newland Computer or generate 15.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Newland Computer vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Fujian Newland Computer |
| Weihai Honglin Electronic |
Fujian Newland and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Newland and Weihai Honglin
The main advantage of trading using opposite Fujian Newland and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Fujian Newland vs. Shanghai V Test Semiconductor | Fujian Newland vs. GRINM Semiconductor Materials | Fujian Newland vs. Southchip Semiconductor Technology | Fujian Newland vs. Giantec Semiconductor Corp |
| Weihai Honglin vs. Eastern Communications Co | Weihai Honglin vs. Strait Innovation Internet | Weihai Honglin vs. Jinhui Liquor Co | Weihai Honglin vs. Fujian Newland Computer |
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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