Correlation Between Aba Chemicals and Hainan Drinda
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By analyzing existing cross correlation between Aba Chemicals Corp and Hainan Drinda Automotive, you can compare the effects of market volatilities on Aba Chemicals and Hainan Drinda 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 Hainan Drinda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Hainan Drinda.
Diversification Opportunities for Aba Chemicals and Hainan Drinda
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aba and Hainan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Hainan Drinda Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Drinda Automotive 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 Hainan Drinda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Drinda Automotive has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Hainan Drinda go up and down completely randomly.
Pair Corralation between Aba Chemicals and Hainan Drinda
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to generate 1.07 times more return on investment than Hainan Drinda. However, Aba Chemicals is 1.07 times more volatile than Hainan Drinda Automotive. It trades about 0.03 of its potential returns per unit of risk. Hainan Drinda Automotive is currently generating about 0.01 per unit of risk. If you would invest 715.00 in Aba Chemicals Corp on September 12, 2024 and sell it today you would earn a total of 105.00 from holding Aba Chemicals Corp or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Hainan Drinda Automotive
Performance |
| Timeline |
| Aba Chemicals Corp |
| Hainan Drinda Automotive |
Aba Chemicals and Hainan Drinda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Hainan Drinda
The main advantage of trading using opposite Aba Chemicals and Hainan Drinda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Hainan Drinda 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 Hainan Drinda will offset losses from the drop in Hainan Drinda's long position.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Hainan Drinda vs. Gansu Jiu Steel | Hainan Drinda vs. Shandong Mining Machinery | Hainan Drinda vs. Aba Chemicals Corp | Hainan Drinda vs. BlueFocus Communication Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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