Correlation Between Lier Chemical and Shenzhen Hifuture
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By analyzing existing cross correlation between Lier Chemical Co and Shenzhen Hifuture Electric, you can compare the effects of market volatilities on Lier Chemical and Shenzhen Hifuture 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 Lier Chemical with a short position of Shenzhen Hifuture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lier Chemical and Shenzhen Hifuture.
Diversification Opportunities for Lier Chemical and Shenzhen Hifuture
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lier and Shenzhen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lier Chemical Co and Shenzhen Hifuture Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hifuture and Lier 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 Lier Chemical Co are associated (or correlated) with Shenzhen Hifuture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hifuture has no effect on the direction of Lier Chemical i.e., Lier Chemical and Shenzhen Hifuture go up and down completely randomly.
Pair Corralation between Lier Chemical and Shenzhen Hifuture
Assuming the 90 days trading horizon Lier Chemical Co is expected to generate 0.54 times more return on investment than Shenzhen Hifuture. However, Lier Chemical Co is 1.86 times less risky than Shenzhen Hifuture. It trades about 0.21 of its potential returns per unit of risk. Shenzhen Hifuture Electric is currently generating about -0.25 per unit of risk. If you would invest 806.00 in Lier Chemical Co on November 5, 2024 and sell it today you would earn a total of 41.00 from holding Lier Chemical Co or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lier Chemical Co vs. Shenzhen Hifuture Electric
Performance |
| Timeline |
| Lier Chemical |
| Shenzhen Hifuture |
Lier Chemical and Shenzhen Hifuture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lier Chemical and Shenzhen Hifuture
The main advantage of trading using opposite Lier Chemical and Shenzhen Hifuture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lier Chemical position performs unexpectedly, Shenzhen Hifuture 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 Shenzhen Hifuture will offset losses from the drop in Shenzhen Hifuture's long position.| Lier Chemical vs. JCHX Mining Management | Lier Chemical vs. Shenzhen Noposion Agrochemicals | Lier Chemical vs. Hubei Xingfa Chemicals | Lier Chemical vs. Changchun BCHT Biotechnology |
| Shenzhen Hifuture vs. Jiangsu Yueda Investment | Shenzhen Hifuture vs. China Asset Management | Shenzhen Hifuture vs. Fibocom Wireless | Shenzhen Hifuture vs. Beijing Kingsoft Office |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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