Correlation Between Inner Mongolia and Hangzhou Gaoxin
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Inner Mongolia and Hangzhou Gaoxin 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 Inner Mongolia with a short position of Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Hangzhou Gaoxin.
Diversification Opportunities for Inner Mongolia and Hangzhou Gaoxin
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Inner and Hangzhou is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Inner Mongolia and Hangzhou Gaoxin
Assuming the 90 days trading horizon Inner Mongolia is expected to generate 16.17 times less return on investment than Hangzhou Gaoxin. But when comparing it to its historical volatility, Inner Mongolia BaoTou is 2.22 times less risky than Hangzhou Gaoxin. It trades about 0.01 of its potential returns per unit of risk. Hangzhou Gaoxin Rubber is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 939.00 in Hangzhou Gaoxin Rubber on November 27, 2024 and sell it today you would earn a total of 555.00 from holding Hangzhou Gaoxin Rubber or generate 59.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Hangzhou Gaoxin Rubber
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Hangzhou Gaoxin Rubber |
Inner Mongolia and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Hangzhou Gaoxin
The main advantage of trading using opposite Inner Mongolia and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin's long position.| Inner Mongolia vs. Anhui Huaheng Biotechnology | Inner Mongolia vs. Advanced Technology Materials | Inner Mongolia vs. Sanxiang Advanced Materials | Inner Mongolia vs. Ningbo Tip Rubber |
| Hangzhou Gaoxin vs. Dongfeng Automobile Co | Hangzhou Gaoxin vs. iSoftStone Information Technology | Hangzhou Gaoxin vs. CICT Mobile Communication | Hangzhou Gaoxin vs. Jilin Jlu Communication |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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