Correlation Between Sichuan Fulin and Sichuan Hebang
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Sichuan Fulin and Sichuan Hebang 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 Sichuan Fulin with a short position of Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Sichuan Hebang.
Diversification Opportunities for Sichuan Fulin and Sichuan Hebang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Sichuan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Sichuan Hebang
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 1.19 times more return on investment than Sichuan Hebang. However, Sichuan Fulin is 1.19 times more volatile than Sichuan Hebang Biotechnology. It trades about 0.08 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.12 per unit of risk. If you would invest 657.00 in Sichuan Fulin Transportation on October 11, 2024 and sell it today you would earn a total of 50.00 from holding Sichuan Fulin Transportation or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Sichuan Hebang Biote |
Sichuan Fulin and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Sichuan Hebang
The main advantage of trading using opposite Sichuan Fulin and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| Sichuan Fulin vs. Dareway Software Co | Sichuan Fulin vs. Muyuan Foodstuff Co | Sichuan Fulin vs. Ligao Foods CoLtd | Sichuan Fulin vs. Great Sun Foods Co |
| Sichuan Hebang vs. Sichuan Fulin Transportation | Sichuan Hebang vs. Dazhong Transportation Group | Sichuan Hebang vs. Anhui Transport Consulting | Sichuan Hebang vs. Shanghai Broadband Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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