Correlation Between Grand Pacific and Hi Lai
Can any of the company-specific risk be diversified away by investing in both Grand Pacific and Hi Lai at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grand Pacific and Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Pacific Petrochemical and Hi Lai Foods Co, you can compare the effects of market volatilities on Grand Pacific and Hi Lai 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 Grand Pacific with a short position of Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Pacific and Hi Lai.
Diversification Opportunities for Grand Pacific and Hi Lai
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grand and 1268 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Grand Pacific Petrochemical and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and Grand Pacific 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 Grand Pacific Petrochemical are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Grand Pacific i.e., Grand Pacific and Hi Lai go up and down completely randomly.
Pair Corralation between Grand Pacific and Hi Lai
Assuming the 90 days trading horizon Grand Pacific Petrochemical is expected to generate 1.5 times more return on investment than Hi Lai. However, Grand Pacific is 1.5 times more volatile than Hi Lai Foods Co. It trades about 0.03 of its potential returns per unit of risk. Hi Lai Foods Co is currently generating about -0.3 per unit of risk. If you would invest 2,330 in Grand Pacific Petrochemical on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Grand Pacific Petrochemical or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Pacific Petrochemical vs. Hi Lai Foods Co
Performance |
| Timeline |
| Grand Pacific Petroc |
| Hi Lai Foods |
Grand Pacific and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Pacific and Hi Lai
The main advantage of trading using opposite Grand Pacific and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Pacific position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| Grand Pacific vs. Tehmag Foods | Grand Pacific vs. Hi Lai Foods Co | Grand Pacific vs. Mechema Chemicals Int | Grand Pacific vs. Lian Hwa Foods |
| Hi Lai vs. EnTie Commercial Bank | Hi Lai vs. Great China Metal | Hi Lai vs. Central Reinsurance Corp | Hi Lai vs. Camellia Metal Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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