Correlation Between Hunan Mendale and Hefei Metalforming
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Hefei Metalforming Mach, you can compare the effects of market volatilities on Hunan Mendale and Hefei Metalforming 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 Hunan Mendale with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Hefei Metalforming.
Diversification Opportunities for Hunan Mendale and Hefei Metalforming
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Hefei is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and Hunan Mendale 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 Hunan Mendale Hometextile are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Hunan Mendale i.e., Hunan Mendale and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Hunan Mendale and Hefei Metalforming
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to under-perform the Hefei Metalforming. In addition to that, Hunan Mendale is 1.74 times more volatile than Hefei Metalforming Mach. It trades about -0.16 of its total potential returns per unit of risk. Hefei Metalforming Mach is currently generating about -0.2 per unit of volatility. If you would invest 766.00 in Hefei Metalforming Mach on September 27, 2024 and sell it today you would lose (86.00) from holding Hefei Metalforming Mach or give up 11.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Mendale Hometextile vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Hunan Mendale Hometextile |
| Hefei Metalforming Mach |
Hunan Mendale and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Mendale and Hefei Metalforming
The main advantage of trading using opposite Hunan Mendale and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Hunan Mendale vs. Zhejiang Yayi Metal | Hunan Mendale vs. Nanxing Furniture Machinery | Hunan Mendale vs. Ningbo Construction Co | Hunan Mendale vs. Hengli Industrial Development |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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