Correlation Between Hubei Forbon and Shanghai Ziyan
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By analyzing existing cross correlation between Hubei Forbon Technology and Shanghai Ziyan Foods, you can compare the effects of market volatilities on Hubei Forbon and Shanghai Ziyan 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 Shanghai Ziyan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Shanghai Ziyan.
Diversification Opportunities for Hubei Forbon and Shanghai Ziyan
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Shanghai Ziyan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Ziyan Foods 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 Shanghai Ziyan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Ziyan Foods has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Shanghai Ziyan go up and down completely randomly.
Pair Corralation between Hubei Forbon and Shanghai Ziyan
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.75 times more return on investment than Shanghai Ziyan. However, Hubei Forbon is 1.75 times more volatile than Shanghai Ziyan Foods. It trades about 0.14 of its potential returns per unit of risk. Shanghai Ziyan Foods is currently generating about 0.04 per unit of risk. If you would invest 841.00 in Hubei Forbon Technology on September 12, 2024 and sell it today you would earn a total of 95.00 from holding Hubei Forbon Technology or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Shanghai Ziyan Foods
Performance |
| Timeline |
| Hubei Forbon Technology |
| Shanghai Ziyan Foods |
Hubei Forbon and Shanghai Ziyan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Shanghai Ziyan
The main advantage of trading using opposite Hubei Forbon and Shanghai Ziyan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Shanghai Ziyan 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 Shanghai Ziyan will offset losses from the drop in Shanghai Ziyan's long position.| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Rongsheng Petrochemical Co |
| Shanghai Ziyan vs. Hubeiyichang Transportation Group | Shanghai Ziyan vs. Anhui Transport Consulting | Shanghai Ziyan vs. Zhejiang Qianjiang Motorcycle | Shanghai Ziyan vs. Jinhui Liquor Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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