Correlation Between Hangzhou Guotai and HUAQIN TECHNOLOGY
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By analyzing existing cross correlation between Hangzhou Guotai Environmental and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Hangzhou Guotai 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 Hangzhou Guotai with a short position of HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Guotai and HUAQIN TECHNOLOGY.
Diversification Opportunities for Hangzhou Guotai and HUAQIN TECHNOLOGY
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hangzhou and HUAQIN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Guotai Environmental 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 Hangzhou Guotai 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 Guotai Environmental 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 Hangzhou Guotai i.e., Hangzhou Guotai and HUAQIN TECHNOLOGY go up and down completely randomly.
Pair Corralation between Hangzhou Guotai and HUAQIN TECHNOLOGY
Assuming the 90 days trading horizon Hangzhou Guotai is expected to generate 6.52 times less return on investment than HUAQIN TECHNOLOGY. But when comparing it to its historical volatility, Hangzhou Guotai Environmental is 1.62 times less risky than HUAQIN TECHNOLOGY. It trades about 0.03 of its potential returns per unit of risk. HUAQIN TECHNOLOGY LTD is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,702 in HUAQIN TECHNOLOGY LTD on October 12, 2024 and sell it today you would earn a total of 1,336 from holding HUAQIN TECHNOLOGY LTD or generate 23.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Guotai Environmental vs. HUAQIN TECHNOLOGY LTD
Performance |
| Timeline |
| Hangzhou Guotai Envi |
| HUAQIN TECHNOLOGY LTD |
Hangzhou Guotai and HUAQIN TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Guotai and HUAQIN TECHNOLOGY
The main advantage of trading using opposite Hangzhou Guotai and HUAQIN TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Guotai 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.| Hangzhou Guotai vs. HUAQIN TECHNOLOGY LTD | Hangzhou Guotai vs. Soyea Technology Co | Hangzhou Guotai vs. Kuangda Technology Group | Hangzhou Guotai vs. Kingsignal Technology Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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