Correlation Between Chengdu Kanghua and Hunan Mendale
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Chengdu Kanghua and Hunan Mendale 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 Chengdu Kanghua with a short position of Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Hunan Mendale.
Diversification Opportunities for Chengdu Kanghua and Hunan Mendale
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Hunan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile and Chengdu Kanghua 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 Chengdu Kanghua Biological are associated (or correlated) with Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Hunan Mendale go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Hunan Mendale
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Hunan Mendale. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Kanghua Biological is 1.13 times less risky than Hunan Mendale. The stock trades about -0.07 of its potential returns per unit of risk. The Hunan Mendale Hometextile is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 254.00 in Hunan Mendale Hometextile on September 3, 2024 and sell it today you would earn a total of 66.00 from holding Hunan Mendale Hometextile or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Hunan Mendale Hometextile |
Chengdu Kanghua and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Hunan Mendale
The main advantage of trading using opposite Chengdu Kanghua and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.| Chengdu Kanghua vs. Chengdu Xinzhu RoadBridge | Chengdu Kanghua vs. China Life Insurance | Chengdu Kanghua vs. Shaanxi Broadcast TV | Chengdu Kanghua vs. Tianshan Aluminum Group |
| Hunan Mendale vs. PetroChina Co Ltd | Hunan Mendale vs. China Mobile Limited | Hunan Mendale vs. Industrial and Commercial | Hunan Mendale vs. China Life Insurance |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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