Correlation Between Hubeiyichang Transportation and Jiangsu Xinri
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Jiangsu Xinri E Vehicle, you can compare the effects of market volatilities on Hubeiyichang Transportation and Jiangsu Xinri 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 Jiangsu Xinri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Jiangsu Xinri.
Diversification Opportunities for Hubeiyichang Transportation and Jiangsu Xinri
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubeiyichang and Jiangsu is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Jiangsu Xinri E Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinri E 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 Jiangsu Xinri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinri E has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Jiangsu Xinri go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Jiangsu Xinri
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.63 times more return on investment than Jiangsu Xinri. However, Hubeiyichang Transportation Group is 1.58 times less risky than Jiangsu Xinri. It trades about 0.03 of its potential returns per unit of risk. Jiangsu Xinri E Vehicle is currently generating about 0.0 per unit of risk. If you would invest 523.00 in Hubeiyichang Transportation Group on September 14, 2024 and sell it today you would earn a total of 46.00 from holding Hubeiyichang Transportation Group or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Jiangsu Xinri E Vehicle
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Jiangsu Xinri E |
Hubeiyichang Transportation and Jiangsu Xinri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Jiangsu Xinri
The main advantage of trading using opposite Hubeiyichang Transportation and Jiangsu Xinri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Jiangsu Xinri 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 Jiangsu Xinri will offset losses from the drop in Jiangsu Xinri's long position.The idea behind Hubeiyichang Transportation Group and Jiangsu Xinri E Vehicle 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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