Correlation Between Hubei Xingfa and Qiaoyin Environmental
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Qiaoyin Environmental Tech, you can compare the effects of market volatilities on Hubei Xingfa and Qiaoyin Environmental 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 Qiaoyin Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Qiaoyin Environmental.
Diversification Opportunities for Hubei Xingfa and Qiaoyin Environmental
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hubei and Qiaoyin is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Qiaoyin Environmental Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qiaoyin Environmental 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 Qiaoyin Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qiaoyin Environmental has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Qiaoyin Environmental go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Qiaoyin Environmental
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to under-perform the Qiaoyin Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Xingfa Chemicals is 1.54 times less risky than Qiaoyin Environmental. The stock trades about -0.01 of its potential returns per unit of risk. The Qiaoyin Environmental Tech is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,033 in Qiaoyin Environmental Tech on November 8, 2024 and sell it today you would earn a total of 169.00 from holding Qiaoyin Environmental Tech or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Qiaoyin Environmental Tech
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Qiaoyin Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Hubei Xingfa and Qiaoyin Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Qiaoyin Environmental
The main advantage of trading using opposite Hubei Xingfa and Qiaoyin Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Qiaoyin Environmental 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 Qiaoyin Environmental will offset losses from the drop in Qiaoyin Environmental's long position.The idea behind Hubei Xingfa Chemicals and Qiaoyin Environmental Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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