Correlation Between Hubeiyichang Transportation and Anhui Gujing
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Anhui Gujing Distillery, you can compare the effects of market volatilities on Hubeiyichang Transportation and Anhui Gujing 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 Hubeiyichang Transportation with a short position of Anhui Gujing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Anhui Gujing.
Diversification Opportunities for Hubeiyichang Transportation and Anhui Gujing
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubeiyichang and Anhui is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Anhui Gujing Distillery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Gujing Distillery and Hubeiyichang Transportation 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 Hubeiyichang Transportation Group are associated (or correlated) with Anhui Gujing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Gujing Distillery has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Anhui Gujing go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Anhui Gujing
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.49 times more return on investment than Anhui Gujing. However, Hubeiyichang Transportation Group is 2.02 times less risky than Anhui Gujing. It trades about 0.19 of its potential returns per unit of risk. Anhui Gujing Distillery is currently generating about -0.03 per unit of risk. If you would invest 508.00 in Hubeiyichang Transportation Group on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Hubeiyichang Transportation Group or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Anhui Gujing Distillery
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Anhui Gujing Distillery |
Hubeiyichang Transportation and Anhui Gujing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Anhui Gujing
The main advantage of trading using opposite Hubeiyichang Transportation and Anhui Gujing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Anhui Gujing 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 Anhui Gujing will offset losses from the drop in Anhui Gujing's long position.The idea behind Hubeiyichang Transportation Group and Anhui Gujing Distillery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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