Correlation Between Cangzhou Mingzhu and Sichuan Hebang
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By analyzing existing cross correlation between Cangzhou Mingzhu Plastic and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Cangzhou Mingzhu and Sichuan Hebang 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 Cangzhou Mingzhu with a short position of Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cangzhou Mingzhu and Sichuan Hebang.
Diversification Opportunities for Cangzhou Mingzhu and Sichuan Hebang
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cangzhou and Sichuan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cangzhou Mingzhu Plastic and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote and Cangzhou Mingzhu 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 Cangzhou Mingzhu Plastic are associated (or correlated) with Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Cangzhou Mingzhu i.e., Cangzhou Mingzhu and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Cangzhou Mingzhu and Sichuan Hebang
Assuming the 90 days trading horizon Cangzhou Mingzhu Plastic is expected to generate 1.09 times more return on investment than Sichuan Hebang. However, Cangzhou Mingzhu is 1.09 times more volatile than Sichuan Hebang Biotechnology. It trades about -0.05 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.06 per unit of risk. If you would invest 362.00 in Cangzhou Mingzhu Plastic on October 26, 2024 and sell it today you would lose (24.00) from holding Cangzhou Mingzhu Plastic or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cangzhou Mingzhu Plastic vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Cangzhou Mingzhu Plastic |
| Sichuan Hebang Biote |
Cangzhou Mingzhu and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cangzhou Mingzhu and Sichuan Hebang
The main advantage of trading using opposite Cangzhou Mingzhu and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cangzhou Mingzhu position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| Cangzhou Mingzhu vs. Zhejiang Kingland Pipeline | Cangzhou Mingzhu vs. Quectel Wireless Solutions | Cangzhou Mingzhu vs. Linkage Software Co | Cangzhou Mingzhu vs. Hainan HNA Infrastructure |
| Sichuan Hebang vs. Cangzhou Mingzhu Plastic | Sichuan Hebang vs. Western Metal Materials | Sichuan Hebang vs. Shandong Publishing Media | Sichuan Hebang vs. Super Dragon Engineering Plastics |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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