Correlation Between Holitech Technology and Xiangyang Automobile
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By analyzing existing cross correlation between Holitech Technology Co and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Holitech Technology and Xiangyang Automobile 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 Holitech Technology with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Xiangyang Automobile.
Diversification Opportunities for Holitech Technology and Xiangyang Automobile
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Holitech and Xiangyang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Holitech Technology 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 Holitech Technology Co are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Holitech Technology i.e., Holitech Technology and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Holitech Technology and Xiangyang Automobile
Assuming the 90 days trading horizon Holitech Technology is expected to generate 4.49 times less return on investment than Xiangyang Automobile. In addition to that, Holitech Technology is 1.1 times more volatile than Xiangyang Automobile Bearing. It trades about 0.01 of its total potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.04 per unit of volatility. If you would invest 665.00 in Xiangyang Automobile Bearing on September 12, 2024 and sell it today you would earn a total of 114.00 from holding Xiangyang Automobile Bearing or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holitech Technology Co vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Holitech Technology |
| Xiangyang Automobile |
Holitech Technology and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holitech Technology and Xiangyang Automobile
The main advantage of trading using opposite Holitech Technology and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holitech Technology position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.The idea behind Holitech Technology Co and Xiangyang Automobile Bearing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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