Correlation Between Hubei Tech and PKU HealthCare
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By analyzing existing cross correlation between Hubei Tech Semiconductors and PKU HealthCare Corp, you can compare the effects of market volatilities on Hubei Tech and PKU HealthCare 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 Hubei Tech with a short position of PKU HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Tech and PKU HealthCare.
Diversification Opportunities for Hubei Tech and PKU HealthCare
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hubei and PKU is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Tech Semiconductors and PKU HealthCare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKU HealthCare Corp and Hubei Tech 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 Hubei Tech Semiconductors are associated (or correlated) with PKU HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKU HealthCare Corp has no effect on the direction of Hubei Tech i.e., Hubei Tech and PKU HealthCare go up and down completely randomly.
Pair Corralation between Hubei Tech and PKU HealthCare
Assuming the 90 days trading horizon Hubei Tech Semiconductors is expected to generate 1.21 times more return on investment than PKU HealthCare. However, Hubei Tech is 1.21 times more volatile than PKU HealthCare Corp. It trades about 0.05 of its potential returns per unit of risk. PKU HealthCare Corp is currently generating about -0.24 per unit of risk. If you would invest 3,117 in Hubei Tech Semiconductors on November 7, 2024 and sell it today you would earn a total of 58.00 from holding Hubei Tech Semiconductors or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Tech Semiconductors vs. PKU HealthCare Corp
Performance |
| Timeline |
| Hubei Tech Semiconductors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PKU HealthCare Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hubei Tech and PKU HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Tech and PKU HealthCare
The main advantage of trading using opposite Hubei Tech and PKU HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Tech position performs unexpectedly, PKU HealthCare 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 PKU HealthCare will offset losses from the drop in PKU HealthCare's long position.The idea behind Hubei Tech Semiconductors and PKU HealthCare Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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