Correlation Between Chengdu Kanghua and Wenzhou Hongfeng
Specify exactly 2 symbols:
By analyzing existing cross correlation between Chengdu Kanghua Biological and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on Chengdu Kanghua and Wenzhou Hongfeng 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 Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Wenzhou Hongfeng.
Diversification Opportunities for Chengdu Kanghua and Wenzhou Hongfeng
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Wenzhou is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele 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 Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Wenzhou Hongfeng
Assuming the 90 days trading horizon Chengdu Kanghua is expected to generate 4.08 times less return on investment than Wenzhou Hongfeng. But when comparing it to its historical volatility, Chengdu Kanghua Biological is 1.1 times less risky than Wenzhou Hongfeng. It trades about 0.03 of its potential returns per unit of risk. Wenzhou Hongfeng Electrical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Wenzhou Hongfeng Electrical on September 5, 2024 and sell it today you would earn a total of 219.00 from holding Wenzhou Hongfeng Electrical or generate 48.34% 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. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Wenzhou Hongfeng Ele |
Chengdu Kanghua and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Wenzhou Hongfeng
The main advantage of trading using opposite Chengdu Kanghua and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.| Chengdu Kanghua vs. Yingde Greatchem Chemicals | Chengdu Kanghua vs. Guangdong Jingyi Metal | Chengdu Kanghua vs. Aluminum Corp of | Chengdu Kanghua vs. YLZ Information Tech |
| Wenzhou Hongfeng vs. Agricultural Bank of | Wenzhou Hongfeng vs. China Construction Bank | Wenzhou Hongfeng vs. Postal Savings Bank | Wenzhou Hongfeng vs. Bank of Communications |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |