Correlation Between Hubei Forbon and Shanghai Rongtai
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By analyzing existing cross correlation between Hubei Forbon Technology and Shanghai Rongtai Health, you can compare the effects of market volatilities on Hubei Forbon and Shanghai Rongtai 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 Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Shanghai Rongtai.
Diversification Opportunities for Hubei Forbon and Shanghai Rongtai
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Hubei Forbon and Shanghai Rongtai
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.18 times more return on investment than Shanghai Rongtai. However, Hubei Forbon is 1.18 times more volatile than Shanghai Rongtai Health. It trades about 0.04 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.01 per unit of risk. If you would invest 677.00 in Hubei Forbon Technology on September 3, 2024 and sell it today you would earn a total of 226.00 from holding Hubei Forbon Technology or generate 33.38% 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. Shanghai Rongtai Health
Performance |
| Timeline |
| Hubei Forbon Technology |
| Shanghai Rongtai Health |
Hubei Forbon and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Shanghai Rongtai
The main advantage of trading using opposite Hubei Forbon and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Shanghai Rongtai 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 Rongtai will offset losses from the drop in Shanghai Rongtai'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 |
| Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. China Mobile Limited | Shanghai Rongtai vs. Industrial and Commercial | Shanghai Rongtai vs. China Life Insurance |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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