Correlation Between Shenzhen Noposion and Hubei Forbon
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Hubei Forbon Technology, you can compare the effects of market volatilities on Shenzhen Noposion 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 Shenzhen Noposion with a short position of Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Hubei Forbon.
Diversification Opportunities for Shenzhen Noposion and Hubei Forbon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Hubei is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical 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 Shenzhen Noposion 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 Shenzhen Noposion Agrochemicals 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 Shenzhen Noposion i.e., Shenzhen Noposion and Hubei Forbon go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Hubei Forbon
Assuming the 90 days trading horizon Shenzhen Noposion is expected to generate 1.62 times less return on investment than Hubei Forbon. But when comparing it to its historical volatility, Shenzhen Noposion Agrochemicals is 1.51 times less risky than Hubei Forbon. It trades about 0.21 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 776.00 in Hubei Forbon Technology on September 4, 2024 and sell it today you would earn a total of 151.00 from holding Hubei Forbon Technology or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Hubei Forbon Technology
Performance |
| Timeline |
| Shenzhen Noposion |
| Hubei Forbon Technology |
Shenzhen Noposion and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Hubei Forbon
The main advantage of trading using opposite Shenzhen Noposion and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion 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.| Shenzhen Noposion vs. Zijin Mining Group | Shenzhen Noposion vs. Wanhua Chemical Group | Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Rongsheng Petrochemical Co |
| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Rongsheng Petrochemical Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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