Correlation Between Chongqing Sulian and Hengli Industrial
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By analyzing existing cross correlation between Chongqing Sulian Plastic and Hengli Industrial Development, you can compare the effects of market volatilities on Chongqing Sulian and Hengli Industrial 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 Chongqing Sulian with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Sulian and Hengli Industrial.
Diversification Opportunities for Chongqing Sulian and Hengli Industrial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Hengli is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sulian Plastic and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Chongqing Sulian 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 Chongqing Sulian Plastic are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Chongqing Sulian i.e., Chongqing Sulian and Hengli Industrial go up and down completely randomly.
Pair Corralation between Chongqing Sulian and Hengli Industrial
Assuming the 90 days trading horizon Chongqing Sulian Plastic is expected to under-perform the Hengli Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Sulian Plastic is 1.11 times less risky than Hengli Industrial. The stock trades about -0.45 of its potential returns per unit of risk. The Hengli Industrial Development is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 235.00 in Hengli Industrial Development on October 7, 2024 and sell it today you would lose (34.00) from holding Hengli Industrial Development or give up 14.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Sulian Plastic vs. Hengli Industrial Development
Performance |
| Timeline |
| Chongqing Sulian Plastic |
| Hengli Industrial |
Chongqing Sulian and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Sulian and Hengli Industrial
The main advantage of trading using opposite Chongqing Sulian and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sulian position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Chongqing Sulian vs. Agricultural Bank of | Chongqing Sulian vs. Postal Savings Bank | Chongqing Sulian vs. Gansu Jiu Steel | Chongqing Sulian vs. Shandong Mining Machinery |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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