Correlation Between Contemporary Amperex and Hubeiyichang Transportation
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By analyzing existing cross correlation between Contemporary Amperex Technology and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Contemporary Amperex and Hubeiyichang Transportation 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 Contemporary Amperex with a short position of Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and Hubeiyichang Transportation.
Diversification Opportunities for Contemporary Amperex and Hubeiyichang Transportation
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Contemporary and Hubeiyichang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation and Contemporary Amperex 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 Contemporary Amperex Technology are associated (or correlated) with Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Contemporary Amperex and Hubeiyichang Transportation
Assuming the 90 days trading horizon Contemporary Amperex is expected to generate 2.75 times less return on investment than Hubeiyichang Transportation. In addition to that, Contemporary Amperex is 1.68 times more volatile than Hubeiyichang Transportation Group. It trades about 0.01 of its total potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.07 per unit of volatility. If you would invest 518.00 in Hubeiyichang Transportation Group on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Hubeiyichang Transportation Group or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| Contemporary Amperex |
| Hubeiyichang Transportation |
Contemporary Amperex and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and Hubeiyichang Transportation
The main advantage of trading using opposite Contemporary Amperex and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.The idea behind Contemporary Amperex Technology and Hubeiyichang Transportation Group 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.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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