Correlation Between Inner Mongolia and Hubei Xingfa
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Inner Mongolia and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Hubei Xingfa.
Diversification Opportunities for Inner Mongolia and Hubei Xingfa
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inner and Hubei is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Inner Mongolia and Hubei Xingfa
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 1.42 times more return on investment than Hubei Xingfa. However, Inner Mongolia is 1.42 times more volatile than Hubei Xingfa Chemicals. It trades about 0.21 of its potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about 0.03 per unit of risk. If you would invest 163.00 in Inner Mongolia BaoTou on August 25, 2024 and sell it today you would earn a total of 31.00 from holding Inner Mongolia BaoTou or generate 19.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Hubei Xingfa Chemicals |
Inner Mongolia and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Hubei Xingfa
The main advantage of trading using opposite Inner Mongolia and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Inner Mongolia vs. Western Metal Materials | Inner Mongolia vs. Cangzhou Mingzhu Plastic | Inner Mongolia vs. Ningxia Building Materials | Inner Mongolia vs. Kangxin New Materials |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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