Correlation Between Dongguan Chitwing and Hang Xiao
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By analyzing existing cross correlation between Dongguan Chitwing Technology and Hang Xiao Steel, you can compare the effects of market volatilities on Dongguan Chitwing and Hang Xiao 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 Dongguan Chitwing with a short position of Hang Xiao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongguan Chitwing and Hang Xiao.
Diversification Opportunities for Dongguan Chitwing and Hang Xiao
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongguan and Hang is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dongguan Chitwing Technology and Hang Xiao Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Xiao Steel and Dongguan Chitwing 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 Dongguan Chitwing Technology are associated (or correlated) with Hang Xiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Xiao Steel has no effect on the direction of Dongguan Chitwing i.e., Dongguan Chitwing and Hang Xiao go up and down completely randomly.
Pair Corralation between Dongguan Chitwing and Hang Xiao
Assuming the 90 days trading horizon Dongguan Chitwing Technology is expected to generate 1.6 times more return on investment than Hang Xiao. However, Dongguan Chitwing is 1.6 times more volatile than Hang Xiao Steel. It trades about 0.1 of its potential returns per unit of risk. Hang Xiao Steel is currently generating about 0.13 per unit of risk. If you would invest 1,945 in Dongguan Chitwing Technology on August 30, 2024 and sell it today you would earn a total of 442.00 from holding Dongguan Chitwing Technology or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongguan Chitwing Technology vs. Hang Xiao Steel
Performance |
| Timeline |
| Dongguan Chitwing |
| Hang Xiao Steel |
Dongguan Chitwing and Hang Xiao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongguan Chitwing and Hang Xiao
The main advantage of trading using opposite Dongguan Chitwing and Hang Xiao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongguan Chitwing position performs unexpectedly, Hang Xiao 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 Hang Xiao will offset losses from the drop in Hang Xiao's long position.| Dongguan Chitwing vs. Glodon Software Co | Dongguan Chitwing vs. Shenzhen Topway Video | Dongguan Chitwing vs. Shenzhen Bioeasy Biotechnology | Dongguan Chitwing vs. ZYF Lopsking Aluminum |
| Hang Xiao vs. PetroChina Co Ltd | Hang Xiao vs. China State Construction | Hang Xiao vs. China Mobile Limited | Hang Xiao vs. Industrial and Commercial |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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