Correlation Between Hunan Nanling and Guangdong Tianhe
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By analyzing existing cross correlation between Hunan Nanling Industrial and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Hunan Nanling and Guangdong Tianhe 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 Hunan Nanling with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Nanling and Guangdong Tianhe.
Diversification Opportunities for Hunan Nanling and Guangdong Tianhe
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hunan and Guangdong is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Nanling Industrial and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Hunan Nanling 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 Hunan Nanling Industrial are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Hunan Nanling i.e., Hunan Nanling and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Hunan Nanling and Guangdong Tianhe
Assuming the 90 days trading horizon Hunan Nanling Industrial is expected to generate 0.53 times more return on investment than Guangdong Tianhe. However, Hunan Nanling Industrial is 1.89 times less risky than Guangdong Tianhe. It trades about 0.14 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about -0.03 per unit of risk. If you would invest 1,226 in Hunan Nanling Industrial on September 25, 2024 and sell it today you would earn a total of 70.00 from holding Hunan Nanling Industrial or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hunan Nanling Industrial vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Hunan Nanling Industrial |
| Guangdong Tianhe Agr |
Hunan Nanling and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Nanling and Guangdong Tianhe
The main advantage of trading using opposite Hunan Nanling and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Nanling position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Hunan Nanling vs. Zijin Mining Group | Hunan Nanling vs. Wanhua Chemical Group | Hunan Nanling vs. Baoshan Iron Steel | Hunan Nanling vs. Shandong Gold Mining |
| Guangdong Tianhe vs. Zijin Mining Group | Guangdong Tianhe vs. Wanhua Chemical Group | Guangdong Tianhe vs. Baoshan Iron Steel | Guangdong Tianhe 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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