Correlation Between Hubei Forbon and Huasi Agricultural
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By analyzing existing cross correlation between Hubei Forbon Technology and Huasi Agricultural Development, you can compare the effects of market volatilities on Hubei Forbon and Huasi Agricultural 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 Hubei Forbon with a short position of Huasi Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Huasi Agricultural.
Diversification Opportunities for Hubei Forbon and Huasi Agricultural
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Huasi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Huasi Agricultural Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huasi Agricultural and Hubei Forbon 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 Hubei Forbon Technology are associated (or correlated) with Huasi Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huasi Agricultural has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Huasi Agricultural go up and down completely randomly.
Pair Corralation between Hubei Forbon and Huasi Agricultural
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.63 times more return on investment than Huasi Agricultural. However, Hubei Forbon is 1.63 times more volatile than Huasi Agricultural Development. It trades about 0.2 of its potential returns per unit of risk. Huasi Agricultural Development is currently generating about 0.19 per unit of risk. If you would invest 800.00 in Hubei Forbon Technology on August 31, 2024 and sell it today you would earn a total of 134.00 from holding Hubei Forbon Technology or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Huasi Agricultural Development
Performance |
| Timeline |
| Hubei Forbon Technology |
| Huasi Agricultural |
Hubei Forbon and Huasi Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Huasi Agricultural
The main advantage of trading using opposite Hubei Forbon and Huasi Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Huasi Agricultural 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 Huasi Agricultural will offset losses from the drop in Huasi Agricultural's long position.| Hubei Forbon vs. China Marine Information | Hubei Forbon vs. Healthcare Co | Hubei Forbon vs. Shanghai Rongtai Health | Hubei Forbon vs. Digital China Information |
| Huasi Agricultural vs. China State Construction | Huasi Agricultural vs. China Merchants Shekou | Huasi Agricultural vs. Huafa Industrial Co | Huasi Agricultural vs. China International Capital |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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