Correlation Between Hubei Xingfa and Shenyang Huitian
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Shenyang Huitian Thermal, you can compare the effects of market volatilities on Hubei Xingfa and Shenyang Huitian 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 Hubei Xingfa with a short position of Shenyang Huitian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Shenyang Huitian.
Diversification Opportunities for Hubei Xingfa and Shenyang Huitian
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Shenyang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Shenyang Huitian Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Huitian Thermal and Hubei Xingfa 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 Hubei Xingfa Chemicals are associated (or correlated) with Shenyang Huitian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Huitian Thermal has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Shenyang Huitian go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Shenyang Huitian
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to generate 0.74 times more return on investment than Shenyang Huitian. However, Hubei Xingfa Chemicals is 1.36 times less risky than Shenyang Huitian. It trades about 0.09 of its potential returns per unit of risk. Shenyang Huitian Thermal is currently generating about 0.03 per unit of risk. If you would invest 2,213 in Hubei Xingfa Chemicals on September 1, 2024 and sell it today you would earn a total of 101.00 from holding Hubei Xingfa Chemicals or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Shenyang Huitian Thermal
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Shenyang Huitian Thermal |
Hubei Xingfa and Shenyang Huitian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Shenyang Huitian
The main advantage of trading using opposite Hubei Xingfa and Shenyang Huitian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Shenyang Huitian 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 Shenyang Huitian will offset losses from the drop in Shenyang Huitian's long position.| Hubei Xingfa vs. Zijin Mining Group | Hubei Xingfa vs. Wanhua Chemical Group | Hubei Xingfa vs. Baoshan Iron Steel | Hubei Xingfa vs. Shandong Gold Mining |
| Shenyang Huitian vs. Shandong Polymer Biochemicals | Shenyang Huitian vs. AUPU Home Style | Shenyang Huitian vs. Zoy Home Furnishing | Shenyang Huitian vs. Jahen Household Products |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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