Correlation Between Hubei Xingfa and Jiangxi Hengda
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Hubei Xingfa and Jiangxi Hengda 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 Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Jiangxi Hengda.
Diversification Opportunities for Hubei Xingfa and Jiangxi Hengda
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hubei and Jiangxi is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi 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 Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Jiangxi Hengda
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to generate 0.6 times more return on investment than Jiangxi Hengda. However, Hubei Xingfa Chemicals is 1.68 times less risky than Jiangxi Hengda. It trades about 0.01 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about 0.0 per unit of risk. If you would invest 2,116 in Hubei Xingfa Chemicals on October 16, 2024 and sell it today you would lose (3.00) from holding Hubei Xingfa Chemicals or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Jiangxi Hengda Hi |
Hubei Xingfa and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Jiangxi Hengda
The main advantage of trading using opposite Hubei Xingfa and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Hubei Xingfa vs. Impulse Qingdao Health | Hubei Xingfa vs. Guangdong Silvere Sci | Hubei Xingfa vs. JCHX Mining Management | Hubei Xingfa vs. Yunnan Jianzhijia Health Chain |
| Jiangxi Hengda vs. Nanxing Furniture Machinery | Jiangxi Hengda vs. Zhejiang Yinlun Machinery | Jiangxi Hengda vs. Servyou Software Group | Jiangxi Hengda vs. Keda Clean Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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