Correlation Between Weihai Honglin and Penyao Environmental
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By analyzing existing cross correlation between Weihai Honglin Electronic and Penyao Environmental Protection, you can compare the effects of market volatilities on Weihai Honglin and Penyao Environmental 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 Weihai Honglin with a short position of Penyao Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Penyao Environmental.
Diversification Opportunities for Weihai Honglin and Penyao Environmental
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weihai and Penyao is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Penyao Environmental Protectio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penyao Environmental and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Penyao Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penyao Environmental has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Penyao Environmental go up and down completely randomly.
Pair Corralation between Weihai Honglin and Penyao Environmental
Assuming the 90 days trading horizon Weihai Honglin is expected to generate 3.13 times less return on investment than Penyao Environmental. In addition to that, Weihai Honglin is 1.15 times more volatile than Penyao Environmental Protection. It trades about 0.01 of its total potential returns per unit of risk. Penyao Environmental Protection is currently generating about 0.04 per unit of volatility. If you would invest 532.00 in Penyao Environmental Protection on September 3, 2024 and sell it today you would earn a total of 99.00 from holding Penyao Environmental Protection or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Penyao Environmental Protectio
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Penyao Environmental |
Weihai Honglin and Penyao Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Penyao Environmental
The main advantage of trading using opposite Weihai Honglin and Penyao Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Penyao Environmental 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 Penyao Environmental will offset losses from the drop in Penyao Environmental's long position.| Weihai Honglin vs. Cultural Investment Holdings | Weihai Honglin vs. Gome Telecom Equipment | Weihai Honglin vs. Bus Online Co | Weihai Honglin vs. Holitech Technology Co |
| Penyao Environmental vs. Cultural Investment Holdings | Penyao Environmental vs. Gome Telecom Equipment | Penyao Environmental vs. Bus Online Co | Penyao Environmental vs. Holitech Technology Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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