Correlation Between HeNan Splendor and Wuhan Xianglong
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By analyzing existing cross correlation between HeNan Splendor Science and Wuhan Xianglong Power, you can compare the effects of market volatilities on HeNan Splendor and Wuhan Xianglong 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 Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and Wuhan Xianglong.
Diversification Opportunities for HeNan Splendor and Wuhan Xianglong
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HeNan and Wuhan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power 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 Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between HeNan Splendor and Wuhan Xianglong
Assuming the 90 days trading horizon HeNan Splendor Science is expected to generate 0.88 times more return on investment than Wuhan Xianglong. However, HeNan Splendor Science is 1.13 times less risky than Wuhan Xianglong. It trades about 0.24 of its potential returns per unit of risk. Wuhan Xianglong Power is currently generating about 0.18 per unit of risk. If you would invest 1,048 in HeNan Splendor Science on November 28, 2024 and sell it today you would earn a total of 81.00 from holding HeNan Splendor Science or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
HeNan Splendor Science vs. Wuhan Xianglong Power
Performance |
| Timeline |
| HeNan Splendor Science |
| Wuhan Xianglong Power |
HeNan Splendor and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and Wuhan Xianglong
The main advantage of trading using opposite HeNan Splendor and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, Wuhan Xianglong 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 Wuhan Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| HeNan Splendor vs. Yankershop Food Co | HeNan Splendor vs. Hygon Information Technology | HeNan Splendor vs. Suzhou Douson Drilling | HeNan Splendor vs. Gan Yuan Foods |
| Wuhan Xianglong vs. Tieling Newcity Investment | Wuhan Xianglong vs. CICT Mobile Communication | Wuhan Xianglong vs. Shenzhen Zqgame | Wuhan Xianglong vs. Beijing Mainstreets Investment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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