Correlation Between HeNan Splendor and DO Home
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By analyzing existing cross correlation between HeNan Splendor Science and DO Home Collection, you can compare the effects of market volatilities on HeNan Splendor and DO Home 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 DO Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and DO Home.
Diversification Opportunities for HeNan Splendor and DO Home
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HeNan and 002798 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and DO Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Home Collection 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 DO Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Home Collection has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and DO Home go up and down completely randomly.
Pair Corralation between HeNan Splendor and DO Home
Assuming the 90 days trading horizon HeNan Splendor Science is expected to generate 1.23 times more return on investment than DO Home. However, HeNan Splendor is 1.23 times more volatile than DO Home Collection. It trades about 0.26 of its potential returns per unit of risk. DO Home Collection is currently generating about 0.17 per unit of risk. If you would invest 862.00 in HeNan Splendor Science on September 3, 2024 and sell it today you would earn a total of 186.00 from holding HeNan Splendor Science or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeNan Splendor Science vs. DO Home Collection
Performance |
| Timeline |
| HeNan Splendor Science |
| DO Home Collection |
HeNan Splendor and DO Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and DO Home
The main advantage of trading using opposite HeNan Splendor and DO Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, DO Home 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 DO Home will offset losses from the drop in DO Home'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 |
| DO Home vs. Anhui Jianghuai Automobile | DO Home vs. Sinomach Automobile Co | DO Home vs. Zotye Automobile Co | DO Home vs. Shuhua Sports Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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