Correlation Between Aba Chemicals and Jiangxi Hengda
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By analyzing existing cross correlation between Aba Chemicals Corp and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Jiangxi Hengda.
Diversification Opportunities for Aba Chemicals and Jiangxi Hengda
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aba and Jiangxi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp 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 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 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 Aba Chemicals i.e., Aba Chemicals and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Aba Chemicals and Jiangxi Hengda
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Jiangxi Hengda. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.79 times less risky than Jiangxi Hengda. The stock trades about -0.29 of its potential returns per unit of risk. The Jiangxi Hengda Hi Tech is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 579.00 in Jiangxi Hengda Hi Tech on October 30, 2024 and sell it today you would lose (88.00) from holding Jiangxi Hengda Hi Tech or give up 15.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aba Chemicals Corp vs. Jiangxi Hengda Hi Tech
Performance |
Timeline |
Aba Chemicals Corp |
Jiangxi Hengda Hi |
Aba Chemicals and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aba Chemicals and Jiangxi Hengda
The main advantage of trading using opposite Aba Chemicals and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Shandong Gold Mining |
Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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