Correlation Between Hunan Mendale and Guangdong Liantai
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Hunan Mendale and Guangdong Liantai 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 Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Guangdong Liantai.
Diversification Opportunities for Hunan Mendale and Guangdong Liantai
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hunan and Guangdong is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai 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 Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Hunan Mendale i.e., Hunan Mendale and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Hunan Mendale and Guangdong Liantai
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to generate 1.4 times more return on investment than Guangdong Liantai. However, Hunan Mendale is 1.4 times more volatile than Guangdong Liantai Environmental. It trades about 0.32 of its potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about 0.25 per unit of risk. If you would invest 254.00 in Hunan Mendale Hometextile on September 5, 2024 and sell it today you would earn a total of 59.00 from holding Hunan Mendale Hometextile or generate 23.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Mendale Hometextile vs. Guangdong Liantai Environmenta
Performance |
| Timeline |
| Hunan Mendale Hometextile |
| Guangdong Liantai |
Hunan Mendale and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Mendale and Guangdong Liantai
The main advantage of trading using opposite Hunan Mendale and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.| Hunan Mendale vs. Industrial and Commercial | Hunan Mendale vs. China Construction Bank | Hunan Mendale vs. Agricultural Bank of | Hunan Mendale vs. Bank of China |
| Guangdong Liantai vs. Anji Foodstuff Co | Guangdong Liantai vs. Ningbo Ligong Online | Guangdong Liantai vs. Hunan Mendale Hometextile | Guangdong Liantai vs. Fiberhome Telecommunication Technologies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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