Correlation Between Hubeiyichang Transportation and Guangdong Liantai
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Hubeiyichang Transportation and Guangdong Liantai 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 Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Guangdong Liantai.
Diversification Opportunities for Hubeiyichang Transportation and Guangdong Liantai
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubeiyichang and Guangdong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai 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 Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Guangdong Liantai
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.66 times more return on investment than Guangdong Liantai. However, Hubeiyichang Transportation Group is 1.51 times less risky than Guangdong Liantai. It trades about 0.13 of its potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about 0.06 per unit of risk. If you would invest 527.00 in Hubeiyichang Transportation Group on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Hubeiyichang Transportation Group or generate 3.42% 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. Guangdong Liantai Environmenta
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Guangdong Liantai |
Hubeiyichang Transportation and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Guangdong Liantai
The main advantage of trading using opposite Hubeiyichang Transportation and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.The idea behind Hubeiyichang Transportation Group and Guangdong Liantai Environmental 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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