Correlation Between HeNan Splendor and Aba Chemicals
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By analyzing existing cross correlation between HeNan Splendor Science and Aba Chemicals Corp, you can compare the effects of market volatilities on HeNan Splendor and Aba Chemicals 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 Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and Aba Chemicals.
Diversification Opportunities for HeNan Splendor and Aba Chemicals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HeNan and Aba is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp 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 Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and Aba Chemicals go up and down completely randomly.
Pair Corralation between HeNan Splendor and Aba Chemicals
Assuming the 90 days trading horizon HeNan Splendor is expected to generate 1.26 times less return on investment than Aba Chemicals. But when comparing it to its historical volatility, HeNan Splendor Science is 1.33 times less risky than Aba Chemicals. It trades about 0.07 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 496.00 in Aba Chemicals Corp on October 26, 2024 and sell it today you would earn a total of 129.00 from holding Aba Chemicals Corp or generate 26.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeNan Splendor Science vs. Aba Chemicals Corp
Performance |
| Timeline |
| HeNan Splendor Science |
| Aba Chemicals Corp |
HeNan Splendor and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and Aba Chemicals
The main advantage of trading using opposite HeNan Splendor and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| HeNan Splendor vs. Bus Online Co | HeNan Splendor vs. Holitech Technology Co | HeNan Splendor vs. Gome Telecom Equipment | HeNan Splendor vs. Cultural Investment Holdings |
| Aba Chemicals vs. Qilu Bank Co | Aba Chemicals vs. Xinjiang Baodi Mining | Aba Chemicals vs. Guangdong Qunxing Toys | Aba Chemicals vs. HeNan Splendor Science |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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