Correlation Between Longxing Chemical and Hang Xiao
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By analyzing existing cross correlation between Longxing Chemical Stock and Hang Xiao Steel, you can compare the effects of market volatilities on Longxing Chemical and Hang Xiao 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 Longxing Chemical with a short position of Hang Xiao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Hang Xiao.
Diversification Opportunities for Longxing Chemical and Hang Xiao
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Longxing and Hang is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Hang Xiao Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Xiao Steel and Longxing Chemical 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 Longxing Chemical Stock are associated (or correlated) with Hang Xiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Xiao Steel has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Hang Xiao go up and down completely randomly.
Pair Corralation between Longxing Chemical and Hang Xiao
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to generate 1.23 times more return on investment than Hang Xiao. However, Longxing Chemical is 1.23 times more volatile than Hang Xiao Steel. It trades about 0.03 of its potential returns per unit of risk. Hang Xiao Steel is currently generating about -0.03 per unit of risk. If you would invest 489.00 in Longxing Chemical Stock on November 28, 2024 and sell it today you would earn a total of 103.00 from holding Longxing Chemical Stock or generate 21.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Hang Xiao Steel
Performance |
| Timeline |
| Longxing Chemical Stock |
| Hang Xiao Steel |
Longxing Chemical and Hang Xiao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Hang Xiao
The main advantage of trading using opposite Longxing Chemical and Hang Xiao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Hang Xiao 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 Hang Xiao will offset losses from the drop in Hang Xiao's long position.| Longxing Chemical vs. Shanghai CEO Environmental | Longxing Chemical vs. Nanxing Furniture Machinery | Longxing Chemical vs. Masterwork Machinery | Longxing Chemical vs. Tjk Machinery Tianjin |
| Hang Xiao vs. Kweichow Moutai Co | Hang Xiao vs. NAURA Technology Group | Hang Xiao vs. BYD Co Ltd | Hang Xiao vs. Zhejiang Orient Gene |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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