Correlation Between Hubeiyichang Transportation and Allgens Medical
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Allgens Medical Technology, you can compare the effects of market volatilities on Hubeiyichang Transportation and Allgens Medical 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 Allgens Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Allgens Medical.
Diversification Opportunities for Hubeiyichang Transportation and Allgens Medical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubeiyichang and Allgens is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Allgens Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allgens Medical Tech 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 Allgens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allgens Medical Tech has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Allgens Medical go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Allgens Medical
Assuming the 90 days trading horizon Hubeiyichang Transportation Group is expected to generate 0.5 times more return on investment than Allgens Medical. However, Hubeiyichang Transportation Group is 2.0 times less risky than Allgens Medical. It trades about 0.19 of its potential returns per unit of risk. Allgens Medical Technology is currently generating about 0.01 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 28.00 from holding Hubeiyichang Transportation Group or generate 5.31% 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. Allgens Medical Technology
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Allgens Medical Tech |
Hubeiyichang Transportation and Allgens Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Allgens Medical
The main advantage of trading using opposite Hubeiyichang Transportation and Allgens Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Allgens Medical 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 Allgens Medical will offset losses from the drop in Allgens Medical's long position.The idea behind Hubeiyichang Transportation Group and Allgens Medical Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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