Correlation Between Hubei Forbon and Shanghai CEO
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By analyzing existing cross correlation between Hubei Forbon Technology and Shanghai CEO Environmental, you can compare the effects of market volatilities on Hubei Forbon and Shanghai CEO 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 CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Shanghai CEO.
Diversification Opportunities for Hubei Forbon and Shanghai CEO
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Shanghai is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ 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 CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Shanghai CEO go up and down completely randomly.
Pair Corralation between Hubei Forbon and Shanghai CEO
Assuming the 90 days trading horizon Hubei Forbon is expected to generate 24.22 times less return on investment than Shanghai CEO. But when comparing it to its historical volatility, Hubei Forbon Technology is 16.02 times less risky than Shanghai CEO. It trades about 0.02 of its potential returns per unit of risk. Shanghai CEO Environmental is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,277 in Shanghai CEO Environmental on October 11, 2024 and sell it today you would lose (1,451) from holding Shanghai CEO Environmental or give up 63.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Shanghai CEO Environmental
Performance |
| Timeline |
| Hubei Forbon Technology |
| Shanghai CEO Environ |
Hubei Forbon and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Shanghai CEO
The main advantage of trading using opposite Hubei Forbon and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Shanghai CEO 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 CEO will offset losses from the drop in Shanghai CEO's long position.| Hubei Forbon vs. Chongqing Brewery Co | Hubei Forbon vs. Eastroc Beverage Group | Hubei Forbon vs. Jiangsu Yanghe Brewery | Hubei Forbon vs. Threes Company Media |
| Shanghai CEO vs. Sunwave Communications Co | Shanghai CEO vs. Tongyu Communication | Shanghai CEO vs. Hubei Forbon Technology | Shanghai CEO vs. Guangxi Wuzhou Communications |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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