Correlation Between Hubeiyichang Transportation and Dymatic Chemicals
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Dymatic Chemicals, you can compare the effects of market volatilities on Hubeiyichang Transportation and Dymatic Chemicals 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 Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Dymatic Chemicals.
Diversification Opportunities for Hubeiyichang Transportation and Dymatic Chemicals
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubeiyichang and Dymatic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals 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 Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Dymatic Chemicals
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.76 times more return on investment than Dymatic Chemicals. However, Hubeiyichang Transportation Group is 1.32 times less risky than Dymatic Chemicals. It trades about -0.01 of its potential returns per unit of risk. Dymatic Chemicals is currently generating about -0.01 per unit of risk. If you would invest 521.00 in Hubeiyichang Transportation Group on October 15, 2024 and sell it today you would lose (58.00) from holding Hubeiyichang Transportation Group or give up 11.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Dymatic Chemicals
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Dymatic Chemicals |
Hubeiyichang Transportation and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Dymatic Chemicals
The main advantage of trading using opposite Hubeiyichang Transportation and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.The idea behind Hubeiyichang Transportation Group and Dymatic Chemicals 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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