Correlation Between Guizhou Chanhen and Sichuan Hebang
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Guizhou Chanhen and Sichuan Hebang 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 Guizhou Chanhen with a short position of Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Sichuan Hebang.
Diversification Opportunities for Guizhou Chanhen and Sichuan Hebang
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guizhou and Sichuan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote and Guizhou Chanhen 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 Guizhou Chanhen Chemical are associated (or correlated) with Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Guizhou Chanhen i.e., Guizhou Chanhen and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Sichuan Hebang
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to generate 1.61 times more return on investment than Sichuan Hebang. However, Guizhou Chanhen is 1.61 times more volatile than Sichuan Hebang Biotechnology. It trades about -0.07 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.61 per unit of risk. If you would invest 2,238 in Guizhou Chanhen Chemical on October 16, 2024 and sell it today you would lose (94.00) from holding Guizhou Chanhen Chemical or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guizhou Chanhen Chemical vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Sichuan Hebang Biote |
Guizhou Chanhen and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Sichuan Hebang
The main advantage of trading using opposite Guizhou Chanhen and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| Guizhou Chanhen vs. Nanjing Putian Telecommunications | Guizhou Chanhen vs. Wuhan Yangtze Communication | Guizhou Chanhen vs. CITIC Guoan Information | Guizhou Chanhen vs. Songz Automobile Air |
| Sichuan Hebang vs. China Eastern Airlines | Sichuan Hebang vs. Allwin Telecommunication Co | Sichuan Hebang vs. Runjian Communication Co | Sichuan Hebang vs. Beijing Bewinner Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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