Correlation Between State Grid and Hefei Metalforming
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By analyzing existing cross correlation between State Grid InformationCommunication and Hefei Metalforming Mach, you can compare the effects of market volatilities on State Grid and Hefei Metalforming 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 State Grid with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Hefei Metalforming.
Diversification Opportunities for State Grid and Hefei Metalforming
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Hefei is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of State Grid i.e., State Grid and Hefei Metalforming go up and down completely randomly.
Pair Corralation between State Grid and Hefei Metalforming
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 0.83 times more return on investment than Hefei Metalforming. However, State Grid InformationCommunication is 1.21 times less risky than Hefei Metalforming. It trades about 0.03 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.01 per unit of risk. If you would invest 1,666 in State Grid InformationCommunication on November 19, 2024 and sell it today you would earn a total of 392.00 from holding State Grid InformationCommunication or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Hefei Metalforming Mach
Performance |
| Timeline |
| State Grid Informati |
| Hefei Metalforming Mach |
State Grid and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Hefei Metalforming
The main advantage of trading using opposite State Grid and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| State Grid vs. Chengdu Spaceon Electronics | State Grid vs. Metro Investment Development | State Grid vs. Harbin Hatou Investment | State Grid vs. Shanghai CEO Environmental |
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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