Correlation Between Hubei Xingfa and Kangyue Technology
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Kangyue Technology Co, you can compare the effects of market volatilities on Hubei Xingfa and Kangyue Technology 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 Kangyue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Kangyue Technology.
Diversification Opportunities for Hubei Xingfa and Kangyue Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Kangyue is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Kangyue Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangyue Technology 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 Kangyue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangyue Technology has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Kangyue Technology go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Kangyue Technology
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to under-perform the Kangyue Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Xingfa Chemicals is 3.11 times less risky than Kangyue Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Kangyue Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 494.00 in Kangyue Technology Co on October 14, 2024 and sell it today you would lose (40.00) from holding Kangyue Technology Co or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Kangyue Technology Co
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Kangyue Technology |
Hubei Xingfa and Kangyue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Kangyue Technology
The main advantage of trading using opposite Hubei Xingfa and Kangyue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Kangyue Technology 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 Kangyue Technology will offset losses from the drop in Kangyue Technology's long position.| Hubei Xingfa vs. Ningbo Tip Rubber | Hubei Xingfa vs. Hainan Airlines Co | Hubei Xingfa vs. Jiangnan Mould Plastic | Hubei Xingfa vs. Jilin OLED Material |
| Kangyue Technology vs. Duzhe Publishing Media | Kangyue Technology vs. TongFu Microelectronics Co | Kangyue Technology vs. Guangzhou Jinyi Media | Kangyue Technology vs. Jinlong Machinery Electronic |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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