Correlation Between Hsinli Chemical and DingZing Advanced
Can any of the company-specific risk be diversified away by investing in both Hsinli Chemical and DingZing Advanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hsinli Chemical and DingZing Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinli Chemical Industrial and DingZing Advanced Materials, you can compare the effects of market volatilities on Hsinli Chemical and DingZing Advanced 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 Hsinli Chemical with a short position of DingZing Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinli Chemical and DingZing Advanced.
Diversification Opportunities for Hsinli Chemical and DingZing Advanced
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hsinli and DingZing is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hsinli Chemical Industrial and DingZing Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DingZing Advanced and Hsinli Chemical 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 Hsinli Chemical Industrial are associated (or correlated) with DingZing Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DingZing Advanced has no effect on the direction of Hsinli Chemical i.e., Hsinli Chemical and DingZing Advanced go up and down completely randomly.
Pair Corralation between Hsinli Chemical and DingZing Advanced
Assuming the 90 days trading horizon Hsinli Chemical Industrial is expected to generate 1.07 times more return on investment than DingZing Advanced. However, Hsinli Chemical is 1.07 times more volatile than DingZing Advanced Materials. It trades about 0.09 of its potential returns per unit of risk. DingZing Advanced Materials is currently generating about 0.09 per unit of risk. If you would invest 1,510 in Hsinli Chemical Industrial on October 11, 2024 and sell it today you would earn a total of 3,310 from holding Hsinli Chemical Industrial or generate 219.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsinli Chemical Industrial vs. DingZing Advanced Materials
Performance |
| Timeline |
| Hsinli Chemical Indu |
| DingZing Advanced |
Hsinli Chemical and DingZing Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsinli Chemical and DingZing Advanced
The main advantage of trading using opposite Hsinli Chemical and DingZing Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinli Chemical position performs unexpectedly, DingZing Advanced 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 DingZing Advanced will offset losses from the drop in DingZing Advanced's long position.| Hsinli Chemical vs. Microelectronics Technology | Hsinli Chemical vs. Intai Technology | Hsinli Chemical vs. Pontex Polyblend CoLtd | Hsinli Chemical vs. Aker Technology Co |
| DingZing Advanced vs. Hsinli Chemical Industrial | DingZing Advanced vs. Acelon Chemicals Fiber | DingZing Advanced vs. Evermore Chemical Industry | DingZing Advanced vs. Double Bond Chemical |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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