Correlation Between Hangzhou Gaoxin and Yifeng Pharmacy
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By analyzing existing cross correlation between Hangzhou Gaoxin Rubber and Yifeng Pharmacy, you can compare the effects of market volatilities on Hangzhou Gaoxin and Yifeng Pharmacy 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 Yifeng Pharmacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gaoxin and Yifeng Pharmacy.
Diversification Opportunities for Hangzhou Gaoxin and Yifeng Pharmacy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Yifeng is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gaoxin Rubber and Yifeng Pharmacy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yifeng Pharmacy 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 Yifeng Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yifeng Pharmacy has no effect on the direction of Hangzhou Gaoxin i.e., Hangzhou Gaoxin and Yifeng Pharmacy go up and down completely randomly.
Pair Corralation between Hangzhou Gaoxin and Yifeng Pharmacy
Assuming the 90 days trading horizon Hangzhou Gaoxin Rubber is expected to generate 1.27 times more return on investment than Yifeng Pharmacy. However, Hangzhou Gaoxin is 1.27 times more volatile than Yifeng Pharmacy. It trades about 0.02 of its potential returns per unit of risk. Yifeng Pharmacy is currently generating about -0.04 per unit of risk. If you would invest 1,027 in Hangzhou Gaoxin Rubber on September 5, 2024 and sell it today you would earn a total of 72.00 from holding Hangzhou Gaoxin Rubber or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Gaoxin Rubber vs. Yifeng Pharmacy
Performance |
| Timeline |
| Hangzhou Gaoxin Rubber |
| Yifeng Pharmacy |
Hangzhou Gaoxin and Yifeng Pharmacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Gaoxin and Yifeng Pharmacy
The main advantage of trading using opposite Hangzhou Gaoxin and Yifeng Pharmacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Gaoxin position performs unexpectedly, Yifeng Pharmacy 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 Yifeng Pharmacy will offset losses from the drop in Yifeng Pharmacy's long position.| Hangzhou Gaoxin vs. Hubei Xingfa Chemicals | Hangzhou Gaoxin vs. Miracll Chemicals Co | Hangzhou Gaoxin vs. Sichuan Hebang Biotechnology | Hangzhou Gaoxin vs. Guangdong Jinming Machinery |
| Yifeng Pharmacy vs. Renxin New Material | Yifeng Pharmacy vs. Hangzhou Gaoxin Rubber | Yifeng Pharmacy vs. China World Trade | Yifeng Pharmacy vs. Cangzhou Mingzhu Plastic |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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