Correlation Between Shandong Hongchuang and Guangzhou Haozhi
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Guangzhou Haozhi Industrial, you can compare the effects of market volatilities on Shandong Hongchuang and Guangzhou Haozhi 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 Shandong Hongchuang with a short position of Guangzhou Haozhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Guangzhou Haozhi.
Diversification Opportunities for Shandong Hongchuang and Guangzhou Haozhi
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shandong and Guangzhou is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Guangzhou Haozhi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haozhi Ind and Shandong Hongchuang 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 Shandong Hongchuang Aluminum are associated (or correlated) with Guangzhou Haozhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haozhi Ind has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Guangzhou Haozhi go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Guangzhou Haozhi
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 1.09 times more return on investment than Guangzhou Haozhi. However, Shandong Hongchuang is 1.09 times more volatile than Guangzhou Haozhi Industrial. It trades about 0.21 of its potential returns per unit of risk. Guangzhou Haozhi Industrial is currently generating about 0.22 per unit of risk. If you would invest 897.00 in Shandong Hongchuang Aluminum on November 3, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Guangzhou Haozhi Industrial
Performance |
| Timeline |
| Shandong Hongchuang |
| Guangzhou Haozhi Ind |
Shandong Hongchuang and Guangzhou Haozhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Guangzhou Haozhi
The main advantage of trading using opposite Shandong Hongchuang and Guangzhou Haozhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Guangzhou Haozhi 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 Guangzhou Haozhi will offset losses from the drop in Guangzhou Haozhi's long position.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Shandong Gold Mining |
| Guangzhou Haozhi vs. Agricultural Bank of | Guangzhou Haozhi vs. Industrial and Commercial | Guangzhou Haozhi vs. Bank of China | Guangzhou Haozhi vs. PetroChina Co Ltd |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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