Correlation Between Hubei Dinglong and Jiangxi Hengda
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By analyzing existing cross correlation between Hubei Dinglong Chemical and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Hubei Dinglong and Jiangxi Hengda 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 Dinglong with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and Jiangxi Hengda.
Diversification Opportunities for Hubei Dinglong and Jiangxi Hengda
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Jiangxi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi and Hubei Dinglong 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 Dinglong Chemical are associated (or correlated) with Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Hubei Dinglong i.e., Hubei Dinglong and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Hubei Dinglong and Jiangxi Hengda
Assuming the 90 days trading horizon Hubei Dinglong Chemical is expected to generate 0.73 times more return on investment than Jiangxi Hengda. However, Hubei Dinglong Chemical is 1.37 times less risky than Jiangxi Hengda. It trades about 0.04 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about 0.0 per unit of risk. If you would invest 2,346 in Hubei Dinglong Chemical on September 3, 2024 and sell it today you would earn a total of 444.00 from holding Hubei Dinglong Chemical or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Dinglong Chemical vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Hubei Dinglong Chemical |
| Jiangxi Hengda Hi |
Hubei Dinglong and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Dinglong and Jiangxi Hengda
The main advantage of trading using opposite Hubei Dinglong and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Rongsheng Petrochemical Co | Hubei Dinglong vs. Hoshine Silicon Ind |
| Jiangxi Hengda vs. Anhui Jianghuai Automobile | Jiangxi Hengda vs. Iat Automobile Technology | Jiangxi Hengda vs. Hubei Dinglong Chemical | Jiangxi Hengda vs. Maoming Petro Chemical Shihua |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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