Correlation Between Hubei Forbon and Chongqing Shunbo
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By analyzing existing cross correlation between Hubei Forbon Technology and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Hubei Forbon and Chongqing Shunbo 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 Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Chongqing Shunbo.
Diversification Opportunities for Hubei Forbon and Chongqing Shunbo
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Chongqing is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum 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 Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Hubei Forbon and Chongqing Shunbo
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.82 times more return on investment than Chongqing Shunbo. However, Hubei Forbon is 1.82 times more volatile than Chongqing Shunbo Aluminum. It trades about 0.2 of its potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about 0.05 per unit of risk. If you would invest 776.00 in Hubei Forbon Technology on September 3, 2024 and sell it today you would earn a total of 127.00 from holding Hubei Forbon Technology or generate 16.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Hubei Forbon Technology |
| Chongqing Shunbo Aluminum |
Hubei Forbon and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Chongqing Shunbo
The main advantage of trading using opposite Hubei Forbon and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Rongsheng Petrochemical Co | Hubei Forbon vs. Hoshine Silicon Ind |
| Chongqing Shunbo vs. Zijin Mining Group | Chongqing Shunbo vs. Baoshan Iron Steel | Chongqing Shunbo vs. Rongsheng Petrochemical Co | Chongqing Shunbo vs. Hoshine Silicon Ind |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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