Correlation Between Hubei Forbon and Hainan HNA
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By analyzing existing cross correlation between Hubei Forbon Technology and Hainan HNA Infrastructure, you can compare the effects of market volatilities on Hubei Forbon and Hainan HNA 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 Hainan HNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Hainan HNA.
Diversification Opportunities for Hubei Forbon and Hainan HNA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Hainan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Hainan HNA Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan HNA Infrastructure 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 Hainan HNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan HNA Infrastructure has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Hainan HNA go up and down completely randomly.
Pair Corralation between Hubei Forbon and Hainan HNA
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.59 times more return on investment than Hainan HNA. However, Hubei Forbon is 1.59 times more volatile than Hainan HNA Infrastructure. It trades about 0.02 of its potential returns per unit of risk. Hainan HNA Infrastructure is currently generating about -0.03 per unit of risk. If you would invest 703.00 in Hubei Forbon Technology on October 16, 2024 and sell it today you would earn a total of 80.00 from holding Hubei Forbon Technology or generate 11.38% 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. Hainan HNA Infrastructure
Performance |
Timeline |
Hubei Forbon Technology |
Hainan HNA Infrastructure |
Hubei Forbon and Hainan HNA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hubei Forbon and Hainan HNA
The main advantage of trading using opposite Hubei Forbon and Hainan HNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Hainan HNA 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 HNA will offset losses from the drop in Hainan HNA's long position.Hubei Forbon vs. Invengo Information Technology | Hubei Forbon vs. ButOne Information Corp | Hubei Forbon vs. Zhengping RoadBridge Constr | Hubei Forbon vs. Chengdu Xinzhu RoadBridge |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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