Correlation Between Renxin New and Henan Lantian
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By analyzing existing cross correlation between Renxin New Material and Henan Lantian Gas, you can compare the effects of market volatilities on Renxin New and Henan Lantian 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 Renxin New with a short position of Henan Lantian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renxin New and Henan Lantian.
Diversification Opportunities for Renxin New and Henan Lantian
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Renxin and Henan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Renxin New Material and Henan Lantian Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Lantian Gas and Renxin New 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 Renxin New Material are associated (or correlated) with Henan Lantian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Lantian Gas has no effect on the direction of Renxin New i.e., Renxin New and Henan Lantian go up and down completely randomly.
Pair Corralation between Renxin New and Henan Lantian
Assuming the 90 days trading horizon Renxin New Material is expected to under-perform the Henan Lantian. In addition to that, Renxin New is 2.27 times more volatile than Henan Lantian Gas. It trades about -0.03 of its total potential returns per unit of risk. Henan Lantian Gas is currently generating about 0.06 per unit of volatility. If you would invest 775.00 in Henan Lantian Gas on September 4, 2024 and sell it today you would earn a total of 344.00 from holding Henan Lantian Gas or generate 44.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.96% |
| Values | Daily Returns |
Renxin New Material vs. Henan Lantian Gas
Performance |
| Timeline |
| Renxin New Material |
| Henan Lantian Gas |
Renxin New and Henan Lantian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renxin New and Henan Lantian
The main advantage of trading using opposite Renxin New and Henan Lantian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renxin New position performs unexpectedly, Henan Lantian 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 Henan Lantian will offset losses from the drop in Henan Lantian's long position.| Renxin New vs. Zijin Mining Group | Renxin New vs. Wanhua Chemical Group | Renxin New vs. Baoshan Iron Steel | Renxin New vs. Shandong Gold Mining |
| Henan Lantian vs. Agricultural Bank of | Henan Lantian vs. Industrial and Commercial | Henan Lantian vs. Bank of China | Henan Lantian vs. China Construction Bank |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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