Correlation Between Hubeiyichang Transportation and Sublime China
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Sublime China Information, you can compare the effects of market volatilities on Hubeiyichang Transportation and Sublime China 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 Sublime China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Sublime China.
Diversification Opportunities for Hubeiyichang Transportation and Sublime China
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hubeiyichang and Sublime is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Sublime China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sublime China Information 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 Sublime China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sublime China Information has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Sublime China go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Sublime China
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to under-perform the Sublime China. But the stock apears to be less risky and, when comparing its historical volatility, Hubeiyichang Transportation Group is 2.2 times less risky than Sublime China. The stock trades about 0.0 of its potential returns per unit of risk. The Sublime China Information is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,865 in Sublime China Information on October 16, 2024 and sell it today you would lose (2,197) from holding Sublime China Information or give up 24.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Sublime China Information
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Sublime China Information |
Hubeiyichang Transportation and Sublime China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Sublime China
The main advantage of trading using opposite Hubeiyichang Transportation and Sublime China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Sublime China 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 Sublime China will offset losses from the drop in Sublime China's long position.The idea behind Hubeiyichang Transportation Group and Sublime China Information 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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