Correlation Between Hunan Nanling and Hubei Forbon
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By analyzing existing cross correlation between Hunan Nanling Industrial and Hubei Forbon Technology, you can compare the effects of market volatilities on Hunan Nanling and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Nanling and Hubei Forbon.
Diversification Opportunities for Hunan Nanling and Hubei Forbon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hunan and Hubei is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Nanling Industrial and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Hunan Nanling i.e., Hunan Nanling and Hubei Forbon go up and down completely randomly.
Pair Corralation between Hunan Nanling and Hubei Forbon
Assuming the 90 days trading horizon Hunan Nanling is expected to generate 3.16 times less return on investment than Hubei Forbon. But when comparing it to its historical volatility, Hunan Nanling Industrial is 1.13 times less risky than Hubei Forbon. It trades about 0.01 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 689.00 in Hubei Forbon Technology on August 28, 2024 and sell it today you would earn a total of 134.00 from holding Hubei Forbon Technology or generate 19.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Nanling Industrial vs. Hubei Forbon Technology
Performance |
| Timeline |
| Hunan Nanling Industrial |
| Hubei Forbon Technology |
Hunan Nanling and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Nanling and Hubei Forbon
The main advantage of trading using opposite Hunan Nanling and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Nanling position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.| Hunan Nanling vs. Bomin Electronics Co | Hunan Nanling vs. Aurora Optoelectronics Co | Hunan Nanling vs. TongFu Microelectronics Co | Hunan Nanling vs. Wuhan Yangtze Communication |
| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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