Correlation Between Hangzhou Gaoxin and Shaanxi Energy
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By analyzing existing cross correlation between Hangzhou Gaoxin Rubber and Shaanxi Energy Investment, you can compare the effects of market volatilities on Hangzhou Gaoxin and Shaanxi Energy 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 Hangzhou Gaoxin with a short position of Shaanxi Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gaoxin and Shaanxi Energy.
Diversification Opportunities for Hangzhou Gaoxin and Shaanxi Energy
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hangzhou and Shaanxi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gaoxin Rubber and Shaanxi Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Energy Investment and Hangzhou Gaoxin 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 Hangzhou Gaoxin Rubber are associated (or correlated) with Shaanxi Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Energy Investment has no effect on the direction of Hangzhou Gaoxin i.e., Hangzhou Gaoxin and Shaanxi Energy go up and down completely randomly.
Pair Corralation between Hangzhou Gaoxin and Shaanxi Energy
Assuming the 90 days trading horizon Hangzhou Gaoxin Rubber is expected to generate 1.85 times more return on investment than Shaanxi Energy. However, Hangzhou Gaoxin is 1.85 times more volatile than Shaanxi Energy Investment. It trades about 0.04 of its potential returns per unit of risk. Shaanxi Energy Investment is currently generating about 0.0 per unit of risk. If you would invest 892.00 in Hangzhou Gaoxin Rubber on September 18, 2024 and sell it today you would earn a total of 119.00 from holding Hangzhou Gaoxin Rubber or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Gaoxin Rubber vs. Shaanxi Energy Investment
Performance |
| Timeline |
| Hangzhou Gaoxin Rubber |
| Shaanxi Energy Investment |
Hangzhou Gaoxin and Shaanxi Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Gaoxin and Shaanxi Energy
The main advantage of trading using opposite Hangzhou Gaoxin and Shaanxi Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Gaoxin position performs unexpectedly, Shaanxi Energy 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 Shaanxi Energy will offset losses from the drop in Shaanxi Energy's long position.| Hangzhou Gaoxin vs. Zijin Mining Group | Hangzhou Gaoxin vs. Wanhua Chemical Group | Hangzhou Gaoxin vs. Baoshan Iron Steel | Hangzhou Gaoxin vs. Shandong Gold Mining |
| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. HOB Biotech Group | Shaanxi Energy vs. Ming Yang Smart | Shaanxi Energy vs. 159681 |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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