Correlation Between Chengdu Spaceon and Hangzhou Gaoxin
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By analyzing existing cross correlation between Chengdu Spaceon Electronics and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Chengdu Spaceon and Hangzhou Gaoxin 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 Chengdu Spaceon with a short position of Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Spaceon and Hangzhou Gaoxin.
Diversification Opportunities for Chengdu Spaceon and Hangzhou Gaoxin
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Hangzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Spaceon Electronics and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber and Chengdu Spaceon 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 Chengdu Spaceon Electronics are associated (or correlated) with Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Chengdu Spaceon i.e., Chengdu Spaceon and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Chengdu Spaceon and Hangzhou Gaoxin
Assuming the 90 days trading horizon Chengdu Spaceon Electronics is expected to under-perform the Hangzhou Gaoxin. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Spaceon Electronics is 1.13 times less risky than Hangzhou Gaoxin. The stock trades about -0.1 of its potential returns per unit of risk. The Hangzhou Gaoxin Rubber is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 927.00 in Hangzhou Gaoxin Rubber on August 25, 2024 and sell it today you would earn a total of 148.00 from holding Hangzhou Gaoxin Rubber or generate 15.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
Chengdu Spaceon Electronics vs. Hangzhou Gaoxin Rubber
Performance |
Timeline |
Chengdu Spaceon Elec |
Hangzhou Gaoxin Rubber |
Chengdu Spaceon and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chengdu Spaceon and Hangzhou Gaoxin
The main advantage of trading using opposite Chengdu Spaceon and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Spaceon position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin's long position.Chengdu Spaceon vs. UE Furniture Co | Chengdu Spaceon vs. Ningbo MedicalSystem Biotechnology | Chengdu Spaceon vs. Shandong Homey Aquatic | Chengdu Spaceon vs. Der International Home |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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