Correlation Between Holitech Technology and Guangdong Skychem
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By analyzing existing cross correlation between Holitech Technology Co and Guangdong Skychem Technology, you can compare the effects of market volatilities on Holitech Technology and Guangdong Skychem 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 Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Guangdong Skychem.
Diversification Opportunities for Holitech Technology and Guangdong Skychem
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Holitech and Guangdong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem 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 Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Holitech Technology i.e., Holitech Technology and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Holitech Technology and Guangdong Skychem
Assuming the 90 days trading horizon Holitech Technology is expected to generate 1.3 times less return on investment than Guangdong Skychem. But when comparing it to its historical volatility, Holitech Technology Co is 1.35 times less risky than Guangdong Skychem. It trades about 0.2 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,221 in Guangdong Skychem Technology on September 26, 2024 and sell it today you would earn a total of 7,234 from holding Guangdong Skychem Technology or generate 138.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holitech Technology Co vs. Guangdong Skychem Technology
Performance |
| Timeline |
| Holitech Technology |
| Guangdong Skychem |
Holitech Technology and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holitech Technology and Guangdong Skychem
The main advantage of trading using opposite Holitech Technology and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holitech Technology position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem's long position.The idea behind Holitech Technology Co and Guangdong Skychem Technology 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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