Correlation Between Guangdong Jingyi and Hubei Forbon
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Hubei Forbon Technology, you can compare the effects of market volatilities on Guangdong Jingyi and Hubei Forbon 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 Guangdong Jingyi with a short position of Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Hubei Forbon.
Diversification Opportunities for Guangdong Jingyi and Hubei Forbon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Hubei is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Hubei Forbon go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Hubei Forbon
Assuming the 90 days trading horizon Guangdong Jingyi is expected to generate 1.35 times less return on investment than Hubei Forbon. But when comparing it to its historical volatility, Guangdong Jingyi Metal is 1.02 times less risky than Hubei Forbon. It trades about 0.05 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 578.00 in Hubei Forbon Technology on August 27, 2024 and sell it today you would earn a total of 229.00 from holding Hubei Forbon Technology or generate 39.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Hubei Forbon Technology
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Hubei Forbon Technology |
Guangdong Jingyi and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Hubei Forbon
The main advantage of trading using opposite Guangdong Jingyi and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Hubei Forbon 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 Forbon will offset losses from the drop in Hubei Forbon's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Rongsheng Petrochemical Co |
| Hubei Forbon vs. Guangzhou Haozhi Industrial | Hubei Forbon vs. Huafa Industrial Co | Hubei Forbon vs. Guangdong Jingyi Metal | Hubei Forbon vs. Shandong Longquan Pipeline |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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