Correlation Between Hubei Forbon and Olympic Circuit
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By analyzing existing cross correlation between Hubei Forbon Technology and Olympic Circuit Technology, you can compare the effects of market volatilities on Hubei Forbon and Olympic Circuit 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 Olympic Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Olympic Circuit.
Diversification Opportunities for Hubei Forbon and Olympic Circuit
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Olympic is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Olympic Circuit Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Circuit Tech 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 Olympic Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Circuit Tech has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Olympic Circuit go up and down completely randomly.
Pair Corralation between Hubei Forbon and Olympic Circuit
Assuming the 90 days trading horizon Hubei Forbon is expected to generate 2.4 times less return on investment than Olympic Circuit. But when comparing it to its historical volatility, Hubei Forbon Technology is 1.09 times less risky than Olympic Circuit. It trades about 0.03 of its potential returns per unit of risk. Olympic Circuit Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,820 in Olympic Circuit Technology on August 28, 2024 and sell it today you would earn a total of 1,238 from holding Olympic Circuit Technology or generate 68.02% 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. Olympic Circuit Technology
Performance |
| Timeline |
| Hubei Forbon Technology |
| Olympic Circuit Tech |
Hubei Forbon and Olympic Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Olympic Circuit
The main advantage of trading using opposite Hubei Forbon and Olympic Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Olympic Circuit 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 Olympic Circuit will offset losses from the drop in Olympic Circuit's long position.| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Shandong Gold Mining |
| Olympic Circuit vs. Nanjing Putian Telecommunications | Olympic Circuit vs. Shenzhen Hifuture Electric | Olympic Circuit vs. Shenyang Huitian Thermal | Olympic Circuit vs. Jiangsu Xinning Modern |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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