Correlation Between Aba Chemicals and New Hope
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By analyzing existing cross correlation between Aba Chemicals Corp and New Hope Dairy, you can compare the effects of market volatilities on Aba Chemicals and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and New Hope.
Diversification Opportunities for Aba Chemicals and New Hope
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aba and New is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and New Hope go up and down completely randomly.
Pair Corralation between Aba Chemicals and New Hope
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the New Hope. In addition to that, Aba Chemicals is 1.32 times more volatile than New Hope Dairy. It trades about -0.02 of its total potential returns per unit of risk. New Hope Dairy is currently generating about 0.03 per unit of volatility. If you would invest 1,261 in New Hope Dairy on October 16, 2024 and sell it today you would earn a total of 240.00 from holding New Hope Dairy or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. New Hope Dairy
Performance |
| Timeline |
| Aba Chemicals Corp |
| New Hope Dairy |
Aba Chemicals and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and New Hope
The main advantage of trading using opposite Aba Chemicals and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Aba Chemicals vs. Tongyu Communication | Aba Chemicals vs. Ningbo Homelink Eco iTech | Aba Chemicals vs. UE Furniture Co | Aba Chemicals vs. Peoples Insurance of |
| New Hope vs. Strait Innovation Internet | New Hope vs. Fiberhome Telecommunication Technologies | New Hope vs. Aba Chemicals Corp | New Hope vs. Jiangxi Hengda Hi Tech |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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