Correlation Between Shenzhen Noposion and Hubei Xingfa
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Shenzhen Noposion and Hubei Xingfa 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 Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Hubei Xingfa.
Diversification Opportunities for Shenzhen Noposion and Hubei Xingfa
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Hubei is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Shenzhen Noposion i.e., Shenzhen Noposion and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Hubei Xingfa
Assuming the 90 days trading horizon Shenzhen Noposion Agrochemicals is expected to under-perform the Hubei Xingfa. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Noposion Agrochemicals is 1.09 times less risky than Hubei Xingfa. The stock trades about -0.02 of its potential returns per unit of risk. The Hubei Xingfa Chemicals is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,290 in Hubei Xingfa Chemicals on August 28, 2024 and sell it today you would lose (17.00) from holding Hubei Xingfa Chemicals or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Shenzhen Noposion |
| Hubei Xingfa Chemicals |
Shenzhen Noposion and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Hubei Xingfa
The main advantage of trading using opposite Shenzhen Noposion and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion position performs unexpectedly, Hubei Xingfa 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 Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Shenzhen Noposion vs. Zijin Mining Group | Shenzhen Noposion vs. Wanhua Chemical Group | Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Shandong Gold Mining |
| Hubei Xingfa vs. Zijin Mining Group | Hubei Xingfa vs. Wanhua Chemical Group | Hubei Xingfa vs. Baoshan Iron Steel | Hubei Xingfa 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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