Correlation Between Hubeiyichang Transportation and Kunwu Jiuding
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Kunwu Jiuding Investment, you can compare the effects of market volatilities on Hubeiyichang Transportation and Kunwu Jiuding 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 Kunwu Jiuding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Kunwu Jiuding.
Diversification Opportunities for Hubeiyichang Transportation and Kunwu Jiuding
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubeiyichang and Kunwu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Kunwu Jiuding Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunwu Jiuding Investment 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 Kunwu Jiuding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunwu Jiuding Investment has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Kunwu Jiuding go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Kunwu Jiuding
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.59 times more return on investment than Kunwu Jiuding. However, Hubeiyichang Transportation Group is 1.7 times less risky than Kunwu Jiuding. It trades about -0.05 of its potential returns per unit of risk. Kunwu Jiuding Investment is currently generating about -0.16 per unit of risk. If you would invest 536.00 in Hubeiyichang Transportation Group on October 30, 2024 and sell it today you would lose (26.00) from holding Hubeiyichang Transportation Group or give up 4.85% 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. Kunwu Jiuding Investment
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Kunwu Jiuding Investment |
Hubeiyichang Transportation and Kunwu Jiuding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Kunwu Jiuding
The main advantage of trading using opposite Hubeiyichang Transportation and Kunwu Jiuding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Kunwu Jiuding 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 Kunwu Jiuding will offset losses from the drop in Kunwu Jiuding's long position.The idea behind Hubeiyichang Transportation Group and Kunwu Jiuding Investment 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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