Correlation Between Guangzhou Hongli and Huadong Medicine
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By analyzing existing cross correlation between Guangzhou Hongli Opto and Huadong Medicine Co, you can compare the effects of market volatilities on Guangzhou Hongli and Huadong Medicine 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 Guangzhou Hongli with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Hongli and Huadong Medicine.
Diversification Opportunities for Guangzhou Hongli and Huadong Medicine
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Huadong is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Hongli Opto and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Guangzhou Hongli 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 Guangzhou Hongli Opto are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Guangzhou Hongli i.e., Guangzhou Hongli and Huadong Medicine go up and down completely randomly.
Pair Corralation between Guangzhou Hongli and Huadong Medicine
Assuming the 90 days trading horizon Guangzhou Hongli Opto is expected to generate 1.67 times more return on investment than Huadong Medicine. However, Guangzhou Hongli is 1.67 times more volatile than Huadong Medicine Co. It trades about 0.02 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.01 per unit of risk. If you would invest 794.00 in Guangzhou Hongli Opto on September 26, 2024 and sell it today you would lose (4.00) from holding Guangzhou Hongli Opto or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
Guangzhou Hongli Opto vs. Huadong Medicine Co
Performance |
| Timeline |
| Guangzhou Hongli Opto |
| Huadong Medicine |
Guangzhou Hongli and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Hongli and Huadong Medicine
The main advantage of trading using opposite Guangzhou Hongli and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Hongli position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Guangzhou Hongli vs. Ming Yang Smart | Guangzhou Hongli vs. 159681 | Guangzhou Hongli vs. 159005 | Guangzhou Hongli vs. Loctek Ergonomic Technology |
| Huadong Medicine vs. Industrial and Commercial | Huadong Medicine vs. Kweichow Moutai Co | Huadong Medicine vs. Agricultural Bank of | Huadong Medicine vs. China Mobile Limited |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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