Correlation Between Hubei Forbon and Xiamen Jihong
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By analyzing existing cross correlation between Hubei Forbon Technology and Xiamen Jihong Package, you can compare the effects of market volatilities on Hubei Forbon and Xiamen Jihong 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 Xiamen Jihong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Xiamen Jihong.
Diversification Opportunities for Hubei Forbon and Xiamen Jihong
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Xiamen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Xiamen Jihong Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Jihong Package 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 Xiamen Jihong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Jihong Package has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Xiamen Jihong go up and down completely randomly.
Pair Corralation between Hubei Forbon and Xiamen Jihong
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.08 times more return on investment than Xiamen Jihong. However, Hubei Forbon is 1.08 times more volatile than Xiamen Jihong Package. It trades about 0.03 of its potential returns per unit of risk. Xiamen Jihong Package is currently generating about -0.01 per unit of risk. If you would invest 704.00 in Hubei Forbon Technology on October 16, 2024 and sell it today you would earn a total of 115.00 from holding Hubei Forbon Technology or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Xiamen Jihong Package
Performance |
| Timeline |
| Hubei Forbon Technology |
| Xiamen Jihong Package |
Hubei Forbon and Xiamen Jihong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Xiamen Jihong
The main advantage of trading using opposite Hubei Forbon and Xiamen Jihong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Xiamen Jihong 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 Xiamen Jihong will offset losses from the drop in Xiamen Jihong's long position.| Hubei Forbon vs. UE Furniture Co | Hubei Forbon vs. Shandong Publishing Media | Hubei Forbon vs. Zoy Home Furnishing | Hubei Forbon vs. Heilongjiang Publishing Media |
| Xiamen Jihong vs. Giantec Semiconductor Corp | Xiamen Jihong vs. Eastroc Beverage Group | Xiamen Jihong vs. GigaDevice SemiconductorBeiji | Xiamen Jihong vs. Beijing Sanyuan Foods |
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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