Correlation Between Hangzhou Gaoxin and Levima Advanced

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Can any of the company-specific risk be diversified away by investing in both Hangzhou Gaoxin and Levima Advanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hangzhou Gaoxin and Levima Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hangzhou Gaoxin Rubber and Levima Advanced Materials, you can compare the effects of market volatilities on Hangzhou Gaoxin and Levima Advanced 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 Levima Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gaoxin and Levima Advanced.

Diversification Opportunities for Hangzhou Gaoxin and Levima Advanced

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hangzhou and Levima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gaoxin Rubber and Levima Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levima Advanced Materials 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 Levima Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levima Advanced Materials has no effect on the direction of Hangzhou Gaoxin i.e., Hangzhou Gaoxin and Levima Advanced go up and down completely randomly.

Pair Corralation between Hangzhou Gaoxin and Levima Advanced

If you would invest  709.00  in Hangzhou Gaoxin Rubber on August 29, 2024 and sell it today you would earn a total of  351.00  from holding Hangzhou Gaoxin Rubber or generate 49.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.72%
ValuesDaily Returns

Hangzhou Gaoxin Rubber  vs.  Levima Advanced Materials

 Performance 
       Timeline  
Hangzhou Gaoxin Rubber 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Hangzhou Gaoxin Rubber are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hangzhou Gaoxin sustained solid returns over the last few months and may actually be approaching a breakup point.
Levima Advanced Materials 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Levima Advanced Materials are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Levima Advanced sustained solid returns over the last few months and may actually be approaching a breakup point.

Hangzhou Gaoxin and Levima Advanced Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hangzhou Gaoxin and Levima Advanced

The main advantage of trading using opposite Hangzhou Gaoxin and Levima Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Gaoxin position performs unexpectedly, Levima Advanced 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 Levima Advanced will offset losses from the drop in Levima Advanced's long position.
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The idea behind Hangzhou Gaoxin Rubber and Levima Advanced Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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