Correlation Between Hubei Dinglong and VT Industrial
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By analyzing existing cross correlation between Hubei Dinglong Chemical and VT Industrial Technology, you can compare the effects of market volatilities on Hubei Dinglong and VT Industrial 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 VT Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and VT Industrial.
Diversification Opportunities for Hubei Dinglong and VT Industrial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and 300707 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical and VT Industrial Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VT Industrial Technology 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 VT Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VT Industrial Technology has no effect on the direction of Hubei Dinglong i.e., Hubei Dinglong and VT Industrial go up and down completely randomly.
Pair Corralation between Hubei Dinglong and VT Industrial
Assuming the 90 days trading horizon Hubei Dinglong Chemical is expected to under-perform the VT Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Dinglong Chemical is 1.42 times less risky than VT Industrial. The stock trades about -0.2 of its potential returns per unit of risk. The VT Industrial Technology is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,895 in VT Industrial Technology on September 12, 2024 and sell it today you would lose (217.00) from holding VT Industrial Technology or give up 11.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Dinglong Chemical vs. VT Industrial Technology
Performance |
| Timeline |
| Hubei Dinglong Chemical |
| VT Industrial Technology |
Hubei Dinglong and VT Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Dinglong and VT Industrial
The main advantage of trading using opposite Hubei Dinglong and VT Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong position performs unexpectedly, VT Industrial 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 VT Industrial will offset losses from the drop in VT Industrial's long position.| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Wanhua Chemical Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Rongsheng Petrochemical Co |
| VT Industrial vs. North Huajin Chemical | VT Industrial vs. Hubei Dinglong Chemical | VT Industrial vs. Xiangyang Automobile Bearing | VT Industrial vs. Dongfeng Automobile 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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