Correlation Between Aba Chemicals and Hengli Industrial
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By analyzing existing cross correlation between Aba Chemicals Corp and Hengli Industrial Development, you can compare the effects of market volatilities on Aba Chemicals and Hengli 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 Aba Chemicals with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Hengli Industrial.
Diversification Opportunities for Aba Chemicals and Hengli Industrial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aba and Hengli is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Hengli Industrial go up and down completely randomly.
Pair Corralation between Aba Chemicals and Hengli Industrial
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Hengli Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.25 times less risky than Hengli Industrial. The stock trades about -0.1 of its potential returns per unit of risk. The Hengli Industrial Development is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 201.00 in Hengli Industrial Development on November 4, 2024 and sell it today you would earn a total of 29.00 from holding Hengli Industrial Development or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Hengli Industrial Development
Performance |
| Timeline |
| Aba Chemicals Corp |
| Hengli Industrial |
Aba Chemicals and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Hengli Industrial
The main advantage of trading using opposite Aba Chemicals and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Hengli 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Aba Chemicals vs. Tongyu Communication | Aba Chemicals vs. Eyebright Medical Technology | Aba Chemicals vs. China Sports Industry | Aba Chemicals vs. Fujian Newland Computer |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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