Correlation Between Kangxin New and Bohai Leasing
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By analyzing existing cross correlation between Kangxin New Materials and Bohai Leasing Co, you can compare the effects of market volatilities on Kangxin New and Bohai Leasing 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 Kangxin New with a short position of Bohai Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangxin New and Bohai Leasing.
Diversification Opportunities for Kangxin New and Bohai Leasing
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kangxin and Bohai is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kangxin New Materials and Bohai Leasing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohai Leasing and Kangxin New 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 Kangxin New Materials are associated (or correlated) with Bohai Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohai Leasing has no effect on the direction of Kangxin New i.e., Kangxin New and Bohai Leasing go up and down completely randomly.
Pair Corralation between Kangxin New and Bohai Leasing
Assuming the 90 days trading horizon Kangxin New Materials is expected to generate 1.07 times more return on investment than Bohai Leasing. However, Kangxin New is 1.07 times more volatile than Bohai Leasing Co. It trades about -0.21 of its potential returns per unit of risk. Bohai Leasing Co is currently generating about -0.23 per unit of risk. If you would invest 212.00 in Kangxin New Materials on October 30, 2024 and sell it today you would lose (20.00) from holding Kangxin New Materials or give up 9.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kangxin New Materials vs. Bohai Leasing Co
Performance |
Timeline |
Kangxin New Materials |
Bohai Leasing |
Kangxin New and Bohai Leasing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kangxin New and Bohai Leasing
The main advantage of trading using opposite Kangxin New and Bohai Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangxin New position performs unexpectedly, Bohai Leasing 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 Bohai Leasing will offset losses from the drop in Bohai Leasing's long position.Kangxin New vs. Dazhong Transportation Group | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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