Correlation Between HeNan Splendor and Yantai Changyu
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By analyzing existing cross correlation between HeNan Splendor Science and Yantai Changyu Pioneer, you can compare the effects of market volatilities on HeNan Splendor and Yantai Changyu 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 HeNan Splendor with a short position of Yantai Changyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and Yantai Changyu.
Diversification Opportunities for HeNan Splendor and Yantai Changyu
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HeNan and Yantai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Yantai Changyu Pioneer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai Changyu Pioneer and HeNan Splendor 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 HeNan Splendor Science are associated (or correlated) with Yantai Changyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai Changyu Pioneer has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and Yantai Changyu go up and down completely randomly.
Pair Corralation between HeNan Splendor and Yantai Changyu
Assuming the 90 days trading horizon HeNan Splendor Science is expected to generate 1.77 times more return on investment than Yantai Changyu. However, HeNan Splendor is 1.77 times more volatile than Yantai Changyu Pioneer. It trades about 0.03 of its potential returns per unit of risk. Yantai Changyu Pioneer is currently generating about -0.02 per unit of risk. If you would invest 796.00 in HeNan Splendor Science on September 3, 2024 and sell it today you would earn a total of 252.00 from holding HeNan Splendor Science or generate 31.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeNan Splendor Science vs. Yantai Changyu Pioneer
Performance |
| Timeline |
| HeNan Splendor Science |
| Yantai Changyu Pioneer |
HeNan Splendor and Yantai Changyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and Yantai Changyu
The main advantage of trading using opposite HeNan Splendor and Yantai Changyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, Yantai Changyu 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 Yantai Changyu will offset losses from the drop in Yantai Changyu's long position.| HeNan Splendor vs. Allied Machinery Co | HeNan Splendor vs. China Railway Construction | HeNan Splendor vs. Anhui Huilong Agricultural | HeNan Splendor vs. Yangmei Chemical Co |
| Yantai Changyu vs. Shanghai Yanpu Metal | Yantai Changyu vs. HeNan Splendor Science | Yantai Changyu vs. Ningbo Thermal Power | Yantai Changyu vs. China Nonferrous Metal |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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