Correlation Between Guangdong Sanhe and North Huajin
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By analyzing existing cross correlation between Guangdong Sanhe Pile and North Huajin Chemical, you can compare the effects of market volatilities on Guangdong Sanhe and North Huajin 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 Guangdong Sanhe with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Sanhe and North Huajin.
Diversification Opportunities for Guangdong Sanhe and North Huajin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and North is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Sanhe Pile and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Guangdong Sanhe 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 Guangdong Sanhe Pile are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Guangdong Sanhe i.e., Guangdong Sanhe and North Huajin go up and down completely randomly.
Pair Corralation between Guangdong Sanhe and North Huajin
Assuming the 90 days trading horizon Guangdong Sanhe Pile is expected to generate 0.92 times more return on investment than North Huajin. However, Guangdong Sanhe Pile is 1.09 times less risky than North Huajin. It trades about 0.21 of its potential returns per unit of risk. North Huajin Chemical is currently generating about 0.01 per unit of risk. If you would invest 645.00 in Guangdong Sanhe Pile on September 13, 2024 and sell it today you would earn a total of 90.00 from holding Guangdong Sanhe Pile or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangdong Sanhe Pile vs. North Huajin Chemical
Performance |
| Timeline |
| Guangdong Sanhe Pile |
| North Huajin Chemical |
Guangdong Sanhe and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Sanhe and North Huajin
The main advantage of trading using opposite Guangdong Sanhe and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Sanhe position performs unexpectedly, North Huajin 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 North Huajin will offset losses from the drop in North Huajin's long position.| Guangdong Sanhe vs. Zijin Mining Group | Guangdong Sanhe vs. Wanhua Chemical Group | Guangdong Sanhe vs. Baoshan Iron Steel | Guangdong Sanhe vs. Shandong Gold Mining |
| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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