Correlation Between Huaxia Eye and Shandong Longquan
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By analyzing existing cross correlation between Huaxia Eye Hospital and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Huaxia Eye and Shandong Longquan 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 Huaxia Eye with a short position of Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaxia Eye and Shandong Longquan.
Diversification Opportunities for Huaxia Eye and Shandong Longquan
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huaxia and Shandong is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Huaxia Eye Hospital and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan and Huaxia Eye 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 Huaxia Eye Hospital are associated (or correlated) with Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Huaxia Eye i.e., Huaxia Eye and Shandong Longquan go up and down completely randomly.
Pair Corralation between Huaxia Eye and Shandong Longquan
Assuming the 90 days trading horizon Huaxia Eye Hospital is expected to under-perform the Shandong Longquan. In addition to that, Huaxia Eye is 1.04 times more volatile than Shandong Longquan Pipeline. It trades about -0.05 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about -0.01 per unit of volatility. If you would invest 571.00 in Shandong Longquan Pipeline on October 30, 2024 and sell it today you would lose (97.00) from holding Shandong Longquan Pipeline or give up 16.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaxia Eye Hospital vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Huaxia Eye Hospital |
| Shandong Longquan |
Huaxia Eye and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaxia Eye and Shandong Longquan
The main advantage of trading using opposite Huaxia Eye and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaxia Eye position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| Huaxia Eye vs. Bank of China | Huaxia Eye vs. Kweichow Moutai Co | Huaxia Eye vs. PetroChina Co Ltd | Huaxia Eye vs. Bank of Communications |
| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan vs. Shandong Gold Mining |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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