Correlation Between Wuhan Hvsen and HUAQIN TECHNOLOGY
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By analyzing existing cross correlation between Wuhan Hvsen Biotechnology and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Wuhan Hvsen and HUAQIN TECHNOLOGY 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 Wuhan Hvsen with a short position of HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Hvsen and HUAQIN TECHNOLOGY.
Diversification Opportunities for Wuhan Hvsen and HUAQIN TECHNOLOGY
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuhan and HUAQIN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Hvsen Biotechnology and HUAQIN TECHNOLOGY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUAQIN TECHNOLOGY LTD and Wuhan Hvsen 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 Wuhan Hvsen Biotechnology are associated (or correlated) with HUAQIN TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUAQIN TECHNOLOGY LTD has no effect on the direction of Wuhan Hvsen i.e., Wuhan Hvsen and HUAQIN TECHNOLOGY go up and down completely randomly.
Pair Corralation between Wuhan Hvsen and HUAQIN TECHNOLOGY
Assuming the 90 days trading horizon Wuhan Hvsen Biotechnology is expected to under-perform the HUAQIN TECHNOLOGY. In addition to that, Wuhan Hvsen is 1.05 times more volatile than HUAQIN TECHNOLOGY LTD. It trades about -0.15 of its total potential returns per unit of risk. HUAQIN TECHNOLOGY LTD is currently generating about 0.27 per unit of volatility. If you would invest 5,943 in HUAQIN TECHNOLOGY LTD on September 27, 2024 and sell it today you would earn a total of 958.00 from holding HUAQIN TECHNOLOGY LTD or generate 16.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Hvsen Biotechnology vs. HUAQIN TECHNOLOGY LTD
Performance |
| Timeline |
| Wuhan Hvsen Biotechnology |
| HUAQIN TECHNOLOGY LTD |
Wuhan Hvsen and HUAQIN TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Hvsen and HUAQIN TECHNOLOGY
The main advantage of trading using opposite Wuhan Hvsen and HUAQIN TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Hvsen position performs unexpectedly, HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY will offset losses from the drop in HUAQIN TECHNOLOGY's long position.| Wuhan Hvsen vs. Western Metal Materials | Wuhan Hvsen vs. Super Dragon Engineering Plastics | Wuhan Hvsen vs. King Strong New Material | Wuhan Hvsen vs. Fuda Alloy Materials |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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