Correlation Between Beijing HuaYuanYiTong and Hunan Valin
Specify exactly 2 symbols:
By analyzing existing cross correlation between Beijing HuaYuanYiTong Thermal and Hunan Valin Steel, you can compare the effects of market volatilities on Beijing HuaYuanYiTong and Hunan Valin 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 Beijing HuaYuanYiTong with a short position of Hunan Valin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing HuaYuanYiTong and Hunan Valin.
Diversification Opportunities for Beijing HuaYuanYiTong and Hunan Valin
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Hunan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Beijing HuaYuanYiTong Thermal and Hunan Valin Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Valin Steel and Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong Thermal are associated (or correlated) with Hunan Valin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Valin Steel has no effect on the direction of Beijing HuaYuanYiTong i.e., Beijing HuaYuanYiTong and Hunan Valin go up and down completely randomly.
Pair Corralation between Beijing HuaYuanYiTong and Hunan Valin
Assuming the 90 days trading horizon Beijing HuaYuanYiTong Thermal is expected to generate 1.64 times more return on investment than Hunan Valin. However, Beijing HuaYuanYiTong is 1.64 times more volatile than Hunan Valin Steel. It trades about 0.15 of its potential returns per unit of risk. Hunan Valin Steel is currently generating about -0.01 per unit of risk. If you would invest 1,084 in Beijing HuaYuanYiTong Thermal on September 5, 2024 and sell it today you would earn a total of 112.00 from holding Beijing HuaYuanYiTong Thermal or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing HuaYuanYiTong Thermal vs. Hunan Valin Steel
Performance |
| Timeline |
| Beijing HuaYuanYiTong |
| Hunan Valin Steel |
Beijing HuaYuanYiTong and Hunan Valin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing HuaYuanYiTong and Hunan Valin
The main advantage of trading using opposite Beijing HuaYuanYiTong and Hunan Valin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing HuaYuanYiTong position performs unexpectedly, Hunan Valin 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 Hunan Valin will offset losses from the drop in Hunan Valin's long position.The idea behind Beijing HuaYuanYiTong Thermal and Hunan Valin Steel 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.
| Hunan Valin vs. China World Trade | Hunan Valin vs. Guocheng Mining Co | Hunan Valin vs. Beijing HuaYuanYiTong Thermal | Hunan Valin vs. Chengtun Mining Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |