Correlation Between SuperAlloy Industrial and Hsinli Chemical
Can any of the company-specific risk be diversified away by investing in both SuperAlloy Industrial and Hsinli Chemical 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 SuperAlloy Industrial and Hsinli Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SuperAlloy Industrial Co, and Hsinli Chemical Industrial, you can compare the effects of market volatilities on SuperAlloy Industrial and Hsinli Chemical 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 SuperAlloy Industrial with a short position of Hsinli Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SuperAlloy Industrial and Hsinli Chemical.
Diversification Opportunities for SuperAlloy Industrial and Hsinli Chemical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SuperAlloy and Hsinli is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SuperAlloy Industrial Co, and Hsinli Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinli Chemical Indu and SuperAlloy Industrial 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 SuperAlloy Industrial Co, are associated (or correlated) with Hsinli Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinli Chemical Indu has no effect on the direction of SuperAlloy Industrial i.e., SuperAlloy Industrial and Hsinli Chemical go up and down completely randomly.
Pair Corralation between SuperAlloy Industrial and Hsinli Chemical
Assuming the 90 days trading horizon SuperAlloy Industrial is expected to generate 1.16 times less return on investment than Hsinli Chemical. In addition to that, SuperAlloy Industrial is 1.39 times more volatile than Hsinli Chemical Industrial. It trades about 0.04 of its total potential returns per unit of risk. Hsinli Chemical Industrial is currently generating about 0.06 per unit of volatility. If you would invest 4,795 in Hsinli Chemical Industrial on October 13, 2024 and sell it today you would earn a total of 100.00 from holding Hsinli Chemical Industrial or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SuperAlloy Industrial Co, vs. Hsinli Chemical Industrial
Performance |
| Timeline |
| SuperAlloy Industrial Co, |
| Hsinli Chemical Indu |
SuperAlloy Industrial and Hsinli Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SuperAlloy Industrial and Hsinli Chemical
The main advantage of trading using opposite SuperAlloy Industrial and Hsinli Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SuperAlloy Industrial position performs unexpectedly, Hsinli Chemical 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 Hsinli Chemical will offset losses from the drop in Hsinli Chemical's long position.| SuperAlloy Industrial vs. Yuanta Financial Holdings | SuperAlloy Industrial vs. First Insurance Co | SuperAlloy Industrial vs. Union Insurance Co | SuperAlloy Industrial vs. Wei Chuan Foods |
| Hsinli Chemical vs. Cowealth Medical Holding | Hsinli Chemical vs. Jia Jie Biomedical | Hsinli Chemical vs. SuperAlloy Industrial Co, | Hsinli Chemical vs. Energenesis Biomedical 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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