Correlation Between Lianhe Chemical and Chahua Modern
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By analyzing existing cross correlation between Lianhe Chemical Technology and Chahua Modern Housewares, you can compare the effects of market volatilities on Lianhe Chemical and Chahua Modern 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 Lianhe Chemical with a short position of Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Chahua Modern.
Diversification Opportunities for Lianhe Chemical and Chahua Modern
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lianhe and Chahua is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares and Lianhe Chemical 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 Lianhe Chemical Technology are associated (or correlated) with Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Chahua Modern go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Chahua Modern
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to under-perform the Chahua Modern. But the stock apears to be less risky and, when comparing its historical volatility, Lianhe Chemical Technology is 1.52 times less risky than Chahua Modern. The stock trades about -0.05 of its potential returns per unit of risk. The Chahua Modern Housewares is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 857.00 in Chahua Modern Housewares on August 31, 2024 and sell it today you would earn a total of 1,330 from holding Chahua Modern Housewares or generate 155.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Chahua Modern Housewares
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Chahua Modern Housewares |
Lianhe Chemical and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Chahua Modern
The main advantage of trading using opposite Lianhe Chemical and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.| Lianhe Chemical vs. Tongling Nonferrous Metals | Lianhe Chemical vs. Xiangyang Automobile Bearing | Lianhe Chemical vs. Guangzhou Haige Communications | Lianhe Chemical vs. Chongqing Shunbo Aluminum |
| Chahua Modern vs. China State Construction | Chahua Modern vs. China Merchants Shekou | Chahua Modern vs. Huafa Industrial Co | Chahua Modern vs. China International Capital |
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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